[Senate Report 114-42]
[From the U.S. Government Publishing Office]
Calendar No. 73
114th Congress } { Report
SENATE
1st Session } { 114-42
======================================================================
THE BIPARTISAN CONGRESSIONAL TRADE PRIORITIES AND ACCOUNTABILITY ACT OF
2015
_______
May 12, 2015.--Ordered to be printed
_______
Mr. Hatch, from the Committee on Finance, submitted the following
R E P O R T
[To accompany S. 995]
Including cost estimate of the Congressional Budget Office
The Committee on Finance, to which was referred the bill
(S. 995) to establish congressional trade negotiating
objectives and enhanced consultation requirements for trade
negotiations, to provide for consideration of trade agreements,
and for other purposes, reports favorably thereon with
amendments and recommends that the bill as amended do pass.
CONTENTS
Page
I. REPORT OF THE COMMITTEE..........................................2
II. SUMMARY..........................................................2
III. GENERAL EXPLANATION..............................................2
A. BACKGROUND.......................................... 2
B. ACTION IN COMMITTEE................................. 6
1. Hearings........................................ 6
2. Consideration of Legislation.................... 7
IV. SECTION-BY-SECTION ANALYSIS......................................7
A. ADDENDUM............................................ 47
V. VOTES OF THE COMMITTEE..........................................48
VI. BUDGETARY IMPACT OF THE BILL....................................51
VII. REGULATORY IMPACT AND OTHER MATTERS.............................53
VIII.ADDITIONAL VIEWS................................................54
IX. MINORITY VIEWS..................................................55
X. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED...........57
I. REPORT OF THE COMMITTEE
The Committee on Finance, to which was referred the bill
(S. 995) to establish congressional trade negotiating
objectives and enhanced consultation requirements for trade
negotiations, to provide for consideration of trade agreements,
and for other purposes, reports favorably thereon with
amendments and recommends that the bill as amended do pass.
II. SUMMARY
The Bipartisan Congressional Trade Priorities and
Accountability Act of 2015 (S. 995) establishes rules for the
implementation of international trade agreements that the
President concludes prior to July 1, 2018, with the possibility
of extension through July 1, 2021. The bill would provide the
President with the authority to proclaim modifications to
certain tariff rates in order to implement such agreements.
Where specific conditions have been met, legislation to
implement trade agreements--including tariff reductions not
subject to proclamation authority and other changes to current
U.S. law--would be subject to agreed upon procedures (known as
``trade authorities procedures'') for consideration in the
House of Representatives and the Senate. Under these trade
authorities procedures, a bill to implement a qualifying trade
agreement would not be subject to amendment and would be
guaranteed a vote in each Chamber by a date certain.
For implementing legislation to qualify for trade
authorities procedures, the underlying trade agreement must
make progress toward achieving the applicable objectives,
policies, and priorities set forth in the bill. Furthermore,
the President must consult regularly with Members of Congress
regarding agreements under negotiation. Congress retains the
right to withdraw the application of trade authorities
procedures to an agreement or agreements in the event the
President fails to consult as required.
Trade authorities procedures for trade agreement
implementing legislation were last enacted in 2002 and extended
in 2005 with respect to agreements entered into before July 1,
2007. It is expected that the present extension of trade
authorities procedures will guide the President's efforts to
conclude a free trade agreement with the Trans-Pacific
Partnership countries, a free trade agreement with the European
Union, agreements entered into under the auspices of the World
Trade Organization (WTO), agreements with respect to the
international trade in services and with respect to
environmental goods entered into with WTO members, as well as
other agreements entered into under the auspices of the WTO and
efforts to conclude additional agreements the President may
identify during the period covered by the bill.
III. GENERAL EXPLANATION
A. Background
Article I, section 8, clause 2 of the Constitution grants
the power to regulate foreign commerce to Congress. Congress
has historically exercised that power through legislation
regulating imports of goods, services, and investment into the
United States. For the first 145 years of the Republic,
Congress exercised its power over trade policy by setting
tariffs directly through frequent enactment of tariff acts,
establishing in detail duty rates for individual imports.
The high tariffs enacted in the Trade Act of 1930 (the
Smoot-Hawley tariff) and the deepening economic depression of
the early 1930s, however, led Congress to establish new tariff-
setting roles for the legislative and executive branches. Under
the Reciprocal Trade Agreements Act of 1934 (P.L. 73-316),
Congress authorized the President to negotiate reciprocal
reductions of tariffs, within a limited range and time period,
and to implement them by proclamation without the need for
implementing legislation.
Under the Trade Agreements Program initiated by Secretary
of State Cordell Hull under authority of the 1934 Act, the
United States negotiated selective reciprocal tariff agreements
with many countries prior to, and during, World War II.
Following the war and for the next several decades, Congress
extended the President's tariff-cutting authority a number of
times. Under this authority, the President negotiated
reductions in tariff levels multilaterally in five rounds under
the General Agreement on Tariffs and Trade (GATT) and afterward
proclaimed the lower tariffs under the authority Congress had
delegated.
The sixth round of multilateral trade negotiations, called
the Kennedy Round (1964-67), involved negotiations on nontariff
as well as tariff barriers. Congress had extended presidential
tariff-cutting authority for the Kennedy Round under the Trade
Expansion Act of 1962 (P.L. 87-794). That authority did not
include negotiation of nontariff barriers. Nonetheless, the
Administration negotiated agreements that involved two
nontariff barriers: (1) the American Selling Price (ASP), which
was a relatively high U.S. import valuation based on domestic
producer prices that primarily protected the U.S. chemical
industry; and (2) a code, or set of rules, on antidumping.
Although the 1962 Act, like the 1934 Act, authorized the
President to negotiate a reduction of ``any existing duty or
other import restriction,'' the view in Congress was that by
entering into the antidumping agreement, the President had
overstepped his delegated power. Congress subsequently did not
enact legislation to implement the agreements with respect to
the two nontariff barriers.
The decision by Congress not to approve the nontariff
commitments made by the President posed a dilemma in terms of
the implementation of any agreement that called for reciprocal
reductions in nontariff measures. Consistent with its
constitutional responsibilities, Congress could not delegate
authority to the President to revise U.S. domestic law by
proclamation in the manner it had delegated the authority to
proclaim changes in tariffs. At the same time, Congress
recognized that the President, as a practical matter, might be
unable to conclude future trade agreements unless he could
assure U.S. trading partners that the agreement would be
considered in a timely manner and would not be amended by
Congress after the fact.
In the early 1970s, in anticipation of a seventh round of
multilateral negotiations that was to include nontariff
barriers, Congress considered a new type of negotiating
authority to grant the President proclamation authority for
nontariff barriers much like the previously granted authority
for tariffs. The proposed legislation would have allowed the
President to reach a nontariff agreement, submit it to
Congress, and unless Congress legislatively disapproved the
agreement, the President would put the changes into effect by
proclamation. There would be no need for implementing
legislation. Legislation granting the President nontariff
proclamation authority was passed by the House but stopped in
the Senate.
In the Trade Act of 1974, Congress enacted procedures that,
in its view, properly balanced the objectives of enabling the
President to negotiate reciprocal reductions of nontariff
barriers while maintaining Congressional authority over changes
to U.S. law. These procedures came to be known as the ``fast
track,'' and more recently Trade Promotion Authority (TPA),
procedures for the consideration of legislation implementing
trade agreements. The procedures were designed to preserve
Congress' constitutional role in the regulation of foreign
commerce, while offering the President and U.S. trading
partners the assurance that a trade agreement requiring changes
in U.S. law would receive an up-or-down vote within a time
certain when brought before Congress.
In order for a trade agreement to qualify for these
procedures, Congress required that the President would have to
consult with the appropriate congressional committees before
and during the negotiation of the agreement and to give notice
to Congress at least 90 days before entering into the
agreement. The President was also required to submit
implementing legislation, a statement of administrative actions
to be taken to implement the agreement, and reasons why the
agreement serves the interests of U.S. commerce. At the time,
there was little, if any, controversy about the procedures
Congress had created; to the contrary, the commonly held view
was that Congress had achieved an enlarged role in trade
negotiations by imposing consultation and notification
requirements.
Congress has preserved the basic structure of the Trade Act
of 1974 each time it has renewed the procedures for the
consideration of trade agreements. These provisions are
contained in Sections 151-154 of the 1974 Act, as amended. The
trade agreement approval procedures under the 1974 Act are not
subject to sunset provisions, but Congress must periodically
reauthorize the President to negotiate agreements that will
qualify for the procedures. Over the years, Congress has
periodically renewed and revised the procedures.
The negotiating authority in the 1974 Act enabled the
Administration to negotiate the Tokyo Round of multilateral
trade negotiations (1974-79) under the General Agreement on
Tariffs and Trade (GATT). After the Tokyo Round was completed,
this Committee took the position that Congress should have an
active role in drafting the legislation to implement the
agreement. The result was that the Committee considered a draft
of the implementing bill through a ``mock'' legislative
process, with committee consideration, amendments, and
conference committee. The President then submitted final
legislation to Congress based on the results of the ``mock''
legislative process. Although not formally outlined in any
document, the executive and legislative branches thus agreed on
a process that allowed congressional involvement in crafting
legislation that would eventually be formally considered under
expedited procedures. The so-called ``mock-markup'' process
continues to this day.
In the Trade Agreements Act of 1979 (P.L. 96-39), the
procedures for the consideration of trade agreements were
renewed for eight years. The Trade and Tariff Act of 1984 (P.L.
98-573) amended the 1974 Act by providing for the negotiation
of bilateral free trade agreements (FTAs). Agreements were
subsequently negotiated with Israel and Canada.
The Omnibus Trade and Competitiveness Act of 1988 extended
the procedures for the consideration of trade agreements for an
additional five years, during which time legislation to
implement the North American Free Trade Agreement (NAFTA) in
1993 was enacted. The Uruguay Round of multilateral trade
negotiations under the GATT, launched in 1986, was concluded
after an extension to the 1988 Act, and the Uruguay Round
Agreements Act (P.L. 103-465) was enacted under the authority
of 1988 Act.
The launch of the Doha Round of World Trade Organization
(WTO) negotiations in November 2001, and the Bush
Administration's interest in bilateral FTA negotiations,
including with Chile and Singapore, led to the enactment of the
Bipartisan Trade Promotion Authority Act of 2002 on August 6,
2002 (P.L. 107-210). Authority provided under this Act was used
to implement eleven FTA implementing bills, including with
respect to FTAs with Chile (2003), Singapore (2003), Australia
(2004), Morocco (2004), the Dominican Republic-Central American
Free Trade Agreement (CAFTA-DR) countries (2005), Bahrain
(2006), and Oman (2006). FTAs with Colombia, Panama, Peru, and
South Korea were concluded prior to the expiration of the 2002
authorities on July 1, 2007, and legislation to implement these
FTAs was enacted for Peru in 2008 and Colombia, Panama and
South Korea in 2011. Negotiations for the WTO Doha Round have
not yielded an agreement requiring congressional action.
The Bipartisan Congressional Trade Priorities and
Accountability Act of 2015 (S.995) is being considered for the
ongoing negotiations of the Trans-Pacific Partnership (TPP)
agreement, the Trans-Atlantic Trade and Investment Partnership
(T-TIP) being negotiated with the European Union (EU), the
Trade in Services Agreement (TISA) being negotiated with
certain members of the WTO seeking to expand the scope of the
WTO Trade in Services Agreement (GATS), and an Environmental
Goods Agreement (EGA) being negotiated with certain members of
the WTO. It may also be used to implement any agreement
resulting from the WTO Doha Round of negotiations, or any other
trade negotiations concluded by the President before July 1,
2018 or July 1, 2021 if no extension disapproval resolution is
adopted. Trade authorities procedures would also apply to
additional trade negotiations that may begin after approval of
this Act but have not yet been notified to Congress.
The TPP is a proposed regional free trade agreement being
negotiated among the United States, Australia, Brunei, Canada,
Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore,
and Vietnam. U.S. negotiators describe the TPP as a
``comprehensive and high-standard'' FTA that aims to liberalize
trade in nearly all goods, including agriculture, and services
and contain rules-based commitments beyond those currently
established in the World Trade Organization (WTO). The
negotiations have been underway since 2010, and a broad outline
of an agreement was announced in November 2011. If concluded as
envisioned, the TPP potentially could significantly reduce
tariff and nontariff barriers to trade and investment among the
parties and could serve as a template for a future trade pact
among Asia-Pacific Economic Cooperation forum (APEC) members
and potentially other countries.
The T-TIP is a proposed ``comprehensive and high-standard''
FTA being negotiated between the United States and the European
Union (EU). Formal negotiations commenced in July 2013. The
United States and the EU seek to enhance trade and market
access by addressing remaining transatlantic barriers to trade
and investment in goods and services, while seeking to
establish new rules-based commitments and to address nontariff
regulatory barriers.
TISA is a proposed sectoral trade agreement among 23
countries, including the EU, launched in April 2013. It seeks
to expand commitments to the WTO General Agreement on Trade in
Services (GATS). While this negotiation is not being conducted
under the auspices of the WTO, it may be incorporated into the
GATS in the future.
The Environmental Goods Agreement (EGA) is a proposed
sectoral trade agreement which was announced in January 2014 by
14 countries, including the United States, representing 86% of
global trade in goods such as wind turbines, solar panels or
advanced batteries. The talks are expected to be handled as an
open plurilateral, i.e., the agreed tariff reduction or
elimination would be applied on a most-favored-nation (MFN)
basis to all WTO members, similar to the 1996 WTO Information
Technology Agreement.
B. Action in Committee
1. Hearings
On January 22, 2015 the Committee held a hearing on Jobs
and a Healthy Economy which discussed the important role of
international trade in creating and sustaining a healthy U.S.
economy as well as the need to renew Trade Promotion Authority.
On January 27, 2015 the Committee discussed the role of Trade
Promotion Authority in advancing America's international trade
agenda during a hearing with United States Trade Representative
Michael Froman on President Obama's 2015 Trade Policy Agenda.
On April 16 and 21, 2015, the Committee held a hearing
entitled Congress and U.S. Tariff Policy which included robust
discussion on the Bipartisan Congressional Trade Priorities and
Accountability Act of 2015. On April 16, 2015, the Committee
heard testimony from Secretary of the Treasury Jacob Lew,
Secretary of Agriculture Tom Vilsack, and United States Trade
Representative Michael Froman. On April 21, 2015, the Committee
heard testimony from Thomas Donahue, President and Chief
Executive Officer of the United States Chamber of Commerce, and
Richard Trumka, President of the AFL-CIO.
In general, witnesses expressed support for creating high-
quality jobs and expanding opportunities for American
businesses through increased U.S. trade taking advantage of
U.S.-led trade agreements. Witnesses stated that increasing
access to foreign markets for U.S. exports through enhanced
trade opportunities should be a priority for the United States.
Witnesses also noted that U.S. trade supports good jobs, spurs
growth, and strengthens the American middle class, while
sustaining American strength and influence abroad. The
witnesses generally agreed that Trade Promotion Authority is a
critical tool for achieving those objectives, and that there is
a need to update Trade Promotion Authority since it was last
enacted in 2002. One witness expressed a view in favor of an
approach to trade and globalization based on including labor
and environmental provisions that go beyond those found in
recent U.S. FTAs., elimination of investor-state dispute
settlement, and requiring enforceable currency provisions in
trade agreements. The witness also favored changes to the
process for considering trade agreements, including changes to
rules on transparency, restrictions on expedited procedures for
the consideration of bills implementing trade agreements, and
other policies such as enforcement.
Another witness noted that while the U.S. market is largely
open to imports from around the world, foreign governments
continue to maintain tariffs on U.S. exports that in some cases
are quite high, and often erect other kinds of barriers against
U.S. goods and services. The need for U.S. trade agreements to
address these barriers and establish U.S.-led rules for
international trade was agreed on by the witnesses.
2. Consideration of Legislation
On April 16, 2015, S. 995 was read twice and referred to
the Committee on Finance. The Committee held a meeting to
consider the bill on April 22, 2015. A motion to report the
bill as amended was approved by a vote of 20 to 6.
IV. SECTION-BY-SECTION ANALYSIS
Section 1. Short title
The short title of the bill is the ``Bipartisan
Congressional Trade Priorities and Accountability Act of
2015.''
Section 2. Trade negotiating objectives
Summary
Section 2 of the bill sets forth the objectives, policies,
and priorities of the United States in negotiating trade
agreements. In order for legislation implementing a trade
agreement to qualify for consideration under the trade
authorities procedures set forth in section 3 of the bill, the
President must state that the agreement makes progress in
achieving the applicable purposes, policies, priorities, and
objectives of the bill. Further, these purposes, policies,
priorities, and objectives should serve as the basis for
consultations between the President and Congress during the
course of an agreement's negotiation.
Section 2 is organized into three subsections defining the
trade negotiating positions of the United States. Subsection
(a) addresses overall objectives--that is, goals that cut
across sectors and issue areas. Subsection (b) addresses
objectives that are specific to particular sectors, such as
goods, services, and agriculture, and particular issue areas,
such as investment, intellectual property, digital trade in
goods and services, the intersection between trade and core
labor standards and trade and the environment, and currency
practices. Subsection (c) addresses capacity building and other
priorities that may have a bearing on the international trade
of the United States and should be pursued in parallel to trade
negotiations.
It is the expectation of the Committee that in affirming
that a trade agreement makes progress toward achieving the
applicable purposes, policies, priorities and objectives of
this bill, the President will address the purposes, policies,
priorities, and objectives in each of the subsections of
section 2.
Section 2(a). Overall trade negotiating objectives
Section 2(a) identifies twelve overall trade negotiating
objectives, as follows:
Obtaining more open, equitable, and
reciprocal market access;
Obtaining the reduction or elimination of
barriers related to trade and investment and other
trade-distorting policies and practices;
Further strengthening the system of
international trade and investment disciplines and
procedures, including dispute settlement;
Fostering economic growth, raising living
standards, enhancing the competitiveness of the United
States, promoting full employment in the United States,
and enhancing the global economy;
Ensuring that trade and environmental
policies are mutually supportive, and seeking to
protect and preserve the environment and enhance the
international means of doing so, while optimizing the
use of the world's resources;
Promoting respect for worker rights and the
rights of children, consistent with core labor
standards as defined in section 11(7) of the bill;
Seeking provisions in trade agreement under
which parties to those agreements ensure that they do
not weaken or reduce protections afforded in domestic
environmental and labor laws in order to gain trade
advantages;
Ensuring that trade agreements afford small
businesses equal access to international markets,
equitable trade benefits, and expanded export
opportunities, and provide for the elimination of
barriers that affect small businesses
disproportionately;
Promoting universal ratification and full
compliance with ILO Convention No. 182 Concerning the
Prohibition and Immediate Action for the Elimination of
the Worst Forms of Child Labor;
Ensuring that trade agreements reflect and
facilitate the interrelated, multi-sectoral nature of
trade and investment;
Recognizing the significance of the Internet
as a trading platform in international commerce; and
Taking into account other legitimate U.S.
domestic objectives, including the protection of
legitimate health or safety, essential security, and
consumer interests and the law and regulations related
thereto.
These overall objectives have been updated to reflect the
central importance of trade agreements in expanding U.S. access
to foreign markets, strengthening the international trading
system, and fostering growth and full employment in the United
States, while making clear that trade agreements can and should
be consistent with other priorities, such as protecting the
environment, the rights of workers, and legitimate domestic
regulatory objectives such as protecting health or safety and
consumer interests. In addition, a new overall negotiating
objective recognizing the significance of the Internet as a
trading platform in international commerce makes clear that as
negotiators seek to expand trading opportunities for U.S.
producers of goods and services, they should be mindful of new
opportunities and barriers arising from technological advances.
This bill provides numerous related provisions that facilitate
continued growth of digital trade, which includes both trade in
digital goods and services and Internet-enabled trade in goods
and services.
Section 2(b). Principal trade negotiating objectives
Section 2(b) sets forth 20 objectives that are sector- or
issue-specific, as follows:
1. Trade in goods
The principal negotiating objectives of the United States
regarding trade in goods are:
To expand competitive market opportunities
for exports of goods from the United States and to
obtain fairer and more open conditions of trade,
including through the utilization of global value
chains, by reducing or eliminating tariff and nontariff
barriers and policies and practices of foreign
governments directly related to trade that decrease
market opportunities for U.S. exports and distort U.S.
trade, and
To obtain reciprocal tariff and nontariff
barrier elimination agreements, including with respect
to products covered in section 111(b) of the Uruguay
Round Agreements Act.
The negotiating objectives in section 2(b)(1) apply to
goods exports of the United States, and direct U.S. negotiators
to seek to reduce or eliminate tariff and nontariff barriers to
U.S. products. Goods exports of the United States continue to
be subject to often high duties at the borders of U.S. trading
partners. The language directs the reduction or elimination of
tariff barriers. The negotiating objectives also apply to
nontariff barriers that restrict the export of U.S. goods.
Nontariff barriers to U.S. exports are applied both at the
border, such as quantitative restrictions and import licensing
requirements, and behind the border, such as discriminatory
trade-related regulations, standards, or conformity assessment
procedures. The objective is directed at policies and
practices, as well as formal statutes and regulations. The
Committee recognizes that some of the most onerous foreign
trade barriers faced by U.S. exporters consist of informal
policies and practices that may not be as easy to identify as a
written law that violates an international trade obligation.
Section 2(b)(1)(B) directs the President to continue to
seek the elimination of duties on a reciprocal basis, including
for products covered in section 111(b) of the Uruguay Round
Agreements Act. It is the Committee's intention that the
President pay particular attention to the elimination of
tariffs on these products, which could result in substantial
benefits to U.S. industry and workers. For many of these
products, U.S. producers remain at a significant competitive
disadvantage. In other sectors, tariff inequities are
aggravated by tariff escalation, which occurs when a country
establishes low or zero tariffs for raw materials but maintains
relatively high tariffs for processed products. The Committee
intends that the Administration pursue ending such practices
for the sectors covered by the proclamation authority provided
in section 111(b) of the Uruguay Round Agreements Act.
The Committee intends this negotiating objective, in
combination with other negotiating objectives, to support
improvements in trade facilitation. Trade facilitation is
critical to creating and sustaining a healthy U.S. economy.
Thus, this negotiating objective is intended to be read
consistently with the overall negotiating objective to ensure
that trade agreements reflect the increasingly interrelated and
multi-sectoral nature of trade and investment activity, and the
negotiating objectives regarding capacity building,
specifically relating to customs and trade facilitation.
2. Trade in services
Section 2(b)(2) reflects the view of this Committee that
trade agreements should be structured to expand U.S. services
trade substantially. Cross-border services exports now exceed
$500 billion annually, generating large, consistent, trade
surpluses in the sector. Yet cross-border U.S. services exports
continue to comprise less than 15 percent of total U.S.
exports, and the United States exports a much lower percentage
of its overall services production than of its goods
production. This Committee intends the parallelism between the
objectives regarding trade in services and the objectives
regarding trade in goods to signal the importance of expanding
U.S. services exports as well, in the manner described in the
bill.
The principal negotiating objective of the United States
regarding trade in services is to expand opportunities for U.S.
services and obtain fairer and more open conditions of trade,
including through utilization of global value chains, by
reducing or eliminating regulatory and other barriers that deny
national treatment and market access or unreasonably restrict
the establishment or operations of service suppliers.
Section 2(b)(2)(B) recognizes for the first time that the
expansion of services opportunities generates benefits for all
sectors of the economy and facilitates trade. Section
2(b)(2)(B) also encourages the pursuit of this objective
through all means, including through a plurilateral agreement
with countries that are willing and able to undertake high
standard services commitments for both existing and new
services. It is the view of the Committee that the United
States should not agree to the inclusion of any party in the
Trade in Services Agreement unless that party has demonstrated
a commitment to meeting the high standards of the agreement in
a timely manner. It is also the view of the Committee that the
Trade in Services Agreement not be delayed, and that the
negotiations move forward only with parties willing and able to
meet the negotiations' ambitious objectives.
The Committee notes that there are four modes of trade in
services: (1) delivery of a service from the territory of one
country into the territory of other country; (2) supply of a
service of one country to the service consumer of any other
country; (3) services provided by a service supplier of one
country in the territory of any other country, and (4) services
provided by a service supplier of one country through the
presence of natural persons in the territory of any other
country.
Congress has long held that trade agreements are not an
appropriate vehicle for enacting immigration-related law or
modifying immigration policy. Article I, section 8, clause 4 of
the Constitution gives Congress the power to ``establish a
uniform Rule of Naturalization,'' and the Supreme Court has
long found that this provision of the Constitution grants
Congress plenary power over immigration policy. For many years,
Congress has made it abundantly clear that international trade
agreements should not change, nor require any change, to U.S.
immigration law and practice. For example, in July 2003 the
Senate unanimously passed a resolution (S. Res. 211) stating
that:
(1) trade agreements are not the appropriate vehicle
for enacting immigration-related laws or modifying
current immigration policy; and
(2) future trade agreements to which the United
States is a party and the legislation implementing the
agreements should not contain immigration-related
provisions.
The Committee continues to believe that it is not
appropriate to negotiate in a trade agreement any provision
that would (1) require changes to U.S. immigration law,
regulations, policy, or practice; (2) accord immigration-
related benefits to parties to trade agreements; (3) commit the
United States to keep unchanged, with respect to nationals of
parties to trade agreements, one or more existing provisions of
U.S. immigration law, policy, or practice; or (4) expand to
additional countries immigration-related commitments already
made by the United States in earlier trade agreements.
3. Trade in agriculture
The principal negotiating objective of the United States
with respect to agriculture is to obtain competitive market
access opportunities for U.S. agricultural exports
substantially equivalent to opportunities afforded foreign
exports in U.S. markets and to achieve fairer and more open
conditions of trade by:
Securing more open and equitable market
access through robust rules on sanitary and
phytosanitary (SPS) measures that encourage the
adoption of international standards and require a
science-based justification for SPS measures, improving
regulatory coherence, requiring that SPS measures are
transparently developed and implemented, and based on
risk assessments that take into account relevant
international guidelines and scientific data, and are
not more restrictive on trade than necessary, while
recognizing that countries may protect human, animal,
or plant life or health in a manner consistent with
their international obligations;
Reducing or eliminating tariffs that
decrease market opportunities for U.S. exports, while
providing adjustment periods for U.S. import-sensitive
products;
Reducing tariffs to levels that are the same
as or lower than those in the United States;
Reducing or eliminating subsidies that
decrease market opportunities for U.S. exports;
Preserving non-trade distorting programs
that support family farms and rural communities;
Eliminating government policies that create
price depressing surpluses;
Eliminating state trading enterprises;
Establishing and strengthening rules,
subject to dispute settlement, that decrease U.S.
market access opportunities or distort agricultural
markets, including: trade distorting activities of
state trading enterprises; unjustified trade
restrictions or commercial requirements, such as
labeling, that affect new technologies, including
biotechnology; unjustified sanitary or phytosanitary
restrictions, including restrictions not based on
scientific principles; other unjustified technical
barriers to trade; and restrictive rules in the
administration of tariff rate quotas;
Eliminating practices that adversely affect
trade in perishable or cyclical products;
Ensuring that import relief mechanisms for
perishable and cyclical agriculture are as accessible
and timely to growers in the United States as those
mechanisms that are used by other countries;
Taking into account whether a party to the
negotiations has failed to adhere to existing
obligations;
Taking into account whether a product is
subject to market distortions by reason of a failure of
a major producing country to adhere to existing
obligations;
Ensuring that countries that accede to the
World Trade Organization have made meaningful market
liberalization commitments in agriculture;
Taking into account the impact that
agreements covering agriculture to which the United
States is a party is having on U.S. agriculture;
Maintaining bona fide food assistance
programs, market development programs, and export
credit programs;
Securing the broadest market access possible
in multilateral, regional, and bilateral negotiations,
while recognizing the effect that negotiations in
multiple fora may have on United States import
sensitive commodities;
Seeking to develop an international
consensus on the treatment of seasonal or perishable
agricultural products in investigations relating to
dumping and safeguards;
Seeking to establish the common base year
for calculating the Aggregated Measurement of Support,
as defined in the Agreement on Agriculture;
Ensuring transparency in the administration
of tariff rate quotas; and
Eliminating and preventing the undermining
of market access for United States products through
improper use of a country's system for protecting or
recognizing geographical indications.
The Committee recognizes that since the last enactment of
Trade Promotion Authority in 2002, the nature of barriers to
U.S. agricultural trade has continued to evolve. Advanced
developing countries, such as Brazil, China, and India, have
significantly increased their use of agricultural subsidies
since 2002. Domestic support in many advanced developing
countries is now higher than domestic support levels in many
developed countries. In many cases, domestic support provided
by advanced developing countries appears to exceed domestic
support limits established under the World Trade Organization
(WTO) Agreement on Agriculture. It is particularly important
for the United States to press advanced developing countries to
make domestic support programs transparent, including through
complete and timely WTO notifications; to enforce agreed upon
limits on domestic support, including the establishment of the
common base year for calculating Aggregated Measurement of
Support under the WTO Agreement on Agriculture as the end of
each country's Uruguay Round implementation period, as reported
in each country's Uruguay Round market access schedule; and to
develop meaningful disciplines on the use of market-distorting
domestic support by advanced developing countries.
Barriers imposed through the improper use of Sanitary and
Phytosanitary (SPS) barriers remains one of the most
significant disruptions to U.S. agricultural exports. While the
Committee recognizes that SPS measures may be used to address
legitimate health and safety concerns, these measures must not
be used as disguised barriers to trade. It is the expectation
of the Committee that U.S. trade agreements to be considered
under trade authorities procedures will achieve stronger rules
on SPS measures than those contained in the WTO Agreement on
the Application of Sanitary and Phytosanitary Measures, and
that the SPS chapters of U.S. trade agreements will be subject
to the same enforcement procedures and remedies as other
enforceable chapters of the trade agreement.
United States agricultural producers also face increasing
use of regulatory restrictions, and political interference with
science-based regulatory decisions, that impede the trade of
innovative agricultural products, including biotechnology. The
United States is the world's leader in research and development
of innovative, safe technologies, but trade in these products
is routinely being disrupted through the delay or denial of
approvals, particularly in Europe and China. The Committee
expects that U.S. negotiators will ensure that foreign
regulatory approval processes are not used to prevent, deny,
delay, or reduce foreign market access to U.S. agriculture
exports with biotechnology traits, and the bill contains
several negotiating objectives aimed at preventing foreign
regulatory approval processes from being used as a trade
barrier to new agriculture technologies. In particular, the
Committee references the objectives in section 2(b)(1)(A);
section 2(b)(3)(A)(i), 2(b)(3)(A)(ii), 2(b)(3)(A)(iv),
2(b)(3)(I)(ii), and 2(b)(3)(I)(iv); section 2(b)(5)(A)(iii),
and 2(b)(5)(B); and section 2(b)(7)(G).
The Committee also recognizes the significance of the
barriers imposed on U.S. agricultural producers by the misuse
of systems of protection for geographical indications (GIs).
Production of U.S. specialty agricultural products using common
food names continues to grow at a significant rate. The
continued growth in exports of these high value-added
agricultural products represents a major opportunity for U.S
producers. While reasonable rules for identifying and
protecting GIs are appropriate and have benefits, certain
trading partners misuse their systems of GI protection to
discriminate against U.S. products by, for example, employing a
registration process lacking in transparency or procedural
fairness that results in the improper protection of generic
terms. The bill directs U.S. negotiators to seek to eliminate
or prevent such practices. The Committee also intends for this
section to reflect the importance the Congress has placed on
this issue, including in ensuring continued use of semi-generic
terms as codified in 26 U.S.C. 5388(c). Lastly, the Committee
also seeks to prevent further attempts to expand systems for
protection of GIs to include terms commonly used as descriptors
by claiming such terms are to be protected as traditional
specialty or traditional quality terms.
4. Foreign investment
The principal negotiating objectives of the United States
regarding foreign investment are to reduce barriers to foreign
investment, while ensuring that foreign investors in the United
States are not accorded greater substantive rights than U.S.
investors in the United States, and to secure for U.S.
investors rights comparable to those available in the United
States, including by:
Reducing or eliminating exceptions to
national treatment;
Freeing the transfer of funds relating to
investments;
Reducing or eliminating performance
requirements, forced technology transfers, and other
unreasonable barriers to investment;
Establishing standards for expropriation and
compensation for expropriation, consistent with U.S.
legal principles and practice;
Establishing standards for fair and
equitable treatment, consistent with U.S. legal
principles and practice, including the principle of due
process;
Providing meaningful procedures for
resolving disputes;
Improving investor-state dispute settlement
mechanisms through procedures to eliminate and deter
frivolous claims, ensure the efficient selection of
arbitrators and the expeditious disposition of claims,
enhance public input, and provide coherence to the
interpretation of investment provisions through an
appellate body or similar mechanism; and
Ensuring the fullest measure of transparency
in investor-state dispute settlement mechanisms, to the
extent consistent with the need to protect information
that is classified or business confidential.
The Committee recognizes that U.S. law provides a high
level of protection for U.S. and foreign investors in the
United States, but that U.S. investors in foreign jurisdictions
often do not receive the same level of basic protections
available in the United States. The lack of adequate legal
protections for U.S. investors is a significant barrier to U.S.
exports. Foreign investment by U.S. companies spurs U.S.
exports, as over 48 percent of U.S. large company exports are
exports to foreign affiliates. Moreover, U.S. parent firms
export more goods and services to their foreign affiliates than
foreign affiliates export to the United States, thus improving
the U.S. balance of trade. In order for these beneficial
effects of foreign investment to continue, it is important that
U.S. investors abroad receive legal protections similar to what
U.S. and foreign investors receive in the United States.
The negotiating objectives therefore direct U.S.
negotiators to secure for U.S. investors rights comparable to
those available in the United States. This includes protections
against discriminatory treatment, similar to the guarantees set
out in the Equal Protection Clause of the U.S. Constitution;
fair and equitable treatment, similar to the protection against
arbitrary and capricious treatment in the Administrative
Procedures Act; and against uncompensated expropriations,
similar to U.S. Supreme Court interpretations of the Takings
Clause of the U.S. Constitution.
Recent investment treaties and trade agreements of the
United States include a number of important clarifications to
ensure that the rights afforded to investors under those
agreements do not go beyond those available under U.S. law.
These provisions include an annex clarifying the standard for
indirect expropriation to ensure consistency with U.S. law, and
a provision clarifying the minimum standard of treatment to
ensure that arbitral decisions reflect U.S. legal principles
and practice. The Committee regards all of these provisions as
important for ensuring investor-state obligations remain
comparable to U.S. law.
Additionally, investment treaties and trade agreements of
the United States now provide more detailed guidance for both
parties and tribunals with regard to procedural and other
matters not included in earlier U.S. investment treaties,
including the expedited review of claims, rules on frivolous
claims, participation of non-disputing third parties in the
arbitration, a statute of limitations, and consolidation of
related claims. The 2012 Model BIT and recent FTAs also
formalized the transparency and openness of arbitral
proceedings. The Committee believes these provisions help
ensure that investor-state dispute settlement meets high
standards of due process and transparency.
The United States has concluded bilateral investment
agreements with more than fifty countries. For the past thirty
years, those agreements have typically included provisions
establishing a mechanism through which neutral arbitrators
resolve disputes between investors and governments relating to
government measures that violate the provisions of U.S.
investment agreements. It is the Committee's view that it is a
priority for negotiators to seek agreements that protect the
rights of U.S. investors equally abroad, without product
discrimination, while ensuring all U.S. investors the existence
of an effective investor-state dispute settlement mechanism.
Where such agreements include a mechanism for investors to
seek redress through investor state dispute settlement, it is
also the Committee's view that this mechanism should not
impinge on the ability of governments to regulate in the public
interest. The Committee believes that current U.S. investment
agreements do not restrict the ability of government to
regulate in the public interest. The Committee also believes
the 2012 U.S. Model Bilateral Investment Treaty serves as a
strong basis for the negotiation of provisions to deter
frivolous challenges to legitimate public interest measures, to
ensure independent and impartial arbitration, and to ensure
high levels of transparency.
In recognition of the particular importance the Committee
places on ensuring that U.S. sovereignty is not impinged upon
by U.S. trade agreement provisions, including provisions
regarding investor-state dispute settlement mechanisms, the
bill for the first time includes a section setting out
Congressional direction on sovereignty (see section 8, below).
This section makes clear that no government can be compelled to
change its law due to an adverse finding by an arbitration
tribunal. The Committee notes that the United States has never
lost a case.
5. Intellectual property
The principal negotiating objectives regarding intellectual
property are to further promote adequate and effective
protection for intellectual property rights through:
ensuring full implementation of the WTO
Agreement on Trade-Related Aspects of Intellectual
Property (TRIPS), particularly with respect to the
enforcement obligations;
ensuring that provisions of any trade
agreement governing intellectual property rights
reflect a standard of protection similar to that found
in U.S. law;
providing strong protection for new
technologies and methods of transmitting and
distributing intellectual property, including in a
manner that facilitates legitimate digital trade;
preventing or eliminating discrimination
regarding intellectual property rights;
ensuring standards of protection and
enforcement keep pace with technological developments,
and in particular ensuring that rights holders have the
legal and technological means to control the use of
their works through the Internet and prevent the
unauthorized use of their works;
providing strong enforcement of intellectual
property rights;
and preventing or eliminating government
involvement in the violation of intellectual property
rights, including through cybertheft and piracy.
The principal negotiating objectives also include securing
fair, equitable, and nondiscriminatory market access
opportunities for U.S. persons that rely upon intellectual
property protection, as well as respecting the 2001 Declaration
on the TRIPS Agreement and Public Health and ensuring that
trade agreements foster innovation and promote access to
medicines.
Protection of intellectual property rights (IPR) is
critical to the U.S. economy, jobs, national security, and the
health and safety of the American people. Much of the U.S.
economy relies on some form of IPR because virtually every
industry either produces or uses it. IPR infringement causes
significant financial losses for U.S. right holders and
businesses around the world. It undermines U.S. innovation and
creativity, hurting U.S. economic competitiveness to the
detriment of American businesses and workers. IPR infringement
also endangers the public and harms national security, as
counterfeit products may pose significant risks to consumer
health and safety.
For these reasons, the principal negotiating objective
directs negotiators to ensure that all countries provide
adequate and effective protection and enforcement of IPR.
Intellectual property enforcement, however, remains inadequate
in many countries around the world. The rates of counterfeiting
and piracy in much of the world remain alarmingly high. The
Committee, therefore, directs U.S. negotiators to ensure U.S.
trading partners provide strong enforcement of intellectual
property rights.
In addition to more traditional forms of IPR infringement,
such as sales of counterfeit and pirated goods by street
vendors or in other physical markets, the increased
availability of broadband Internet connections around the world
has fueled the market for IPR infringing products online. To
help address the challenges to IPR protection and enforcement
related to the Internet, U.S. negotiators should ensure
standards of protection and enforcement keep pace with
technological developments, and in particular ensure that right
holders have the legal and technological means to control the
use of their works through the Internet and to prevent
unauthorized use of their works.
Inadequate protection for trade secrets and trade secret
theft are increasing problems around the world. A trade secret
is often among a company's core business assets, and protection
of its trade secret is essential for that company's ability to
compete. Trade secret theft, including industrial and economic
espionage, imposes significant costs on the U.S. economy,
weakens U.S. competitiveness, puts U.S. jobs at risk, and
threatens national security. For these reasons, the Committee
is concerned about inadequate protection for trade secrets and
the rise in trade secret theft by U.S. trading partners.
The Committee updated the intellectual property rights
negotiating objectives to address the concern of trade secret
theft by governments, directing U.S. negotiators to prevent or
eliminate government theft of intellectual property rights,
such as trade secret theft, including through cyber theft.
The updated negotiating objective to prevent or eliminate
government theft of intellectual property rights is also
intended to direct U.S. negotiators to address another problem
faced by U.S. right holders, which is foreign governments'
continued use of pirated software. U.S. negotiators should
ensure foreign governments do not use unauthorized software.
The Committee has updated section (5)(A)(ii) to emphasize the
critical importance of including in U.S. trade agreements IP
provisions that facilitate legitimate digital trade. In
particular, this section reflects the view of the Committee
that U.S. trade agreements should contain copyright provisions
that provide adequate and effective protection for U.S. right
holders as well as foster an appropriate balance in copyright
systems, inter alia by means of limitations and exceptions
consistent with the internationally recognized 3-step test.
Adequate and effective intellectual property protection is
critical to provide the incentives necessary for is critical to
provide the incentives necessary for the development and
marketing of new medicines, including biologics. Without these
innovative medicines, the market for generic medicines would
not exist. U.S. negotiators must, therefore, ensure that trade
agreements foster innovation so that patients around the world
can benefit from access to lifesaving medicines. Strong
regulatory data protection is a key factor to incentivize
research and investment in biologics. Thus achieving terms of
regulatory data protection similar to those found in U.S. law
should continue to be a high priority for U.S. trade
negotiators. The existence of a robust generic market increases
the affordability of medicines. U.S. negotiators should promote
access to innovative and generic medicines by addressing the
market access barriers faced by U.S. producers of medicines,
including those market access barriers that are discriminatory
and non-transparent.
While the TRIPS Agreement was an important milestone in the
effort to raise standards of IPR protection and enforcement
around the world, TRIPS provides only minimum standards. Nearly
20 years after the TRIPS Agreement came into force, all WTO
member countries should at least meet the minimum standards for
protection and enforcement of IPR provided by the TRIPS
Agreement. U.S. negotiators must ensure that U.S. trading
partners have fully implemented the TRIPS Agreement,
particularly the enforcement obligations.
This Committee further intends for U.S. negotiators to seek
bilateral, plurilateral, and multilateral agreements that
include intellectual property provisions that go beyond the
TRIPS Agreement and reflect a high standard of intellectual
property protection similar to that found in U.S. law.
Finally, the Committee notes that U.S. industries that rely
on intellectual property protection continue to suffer from
unnecessary and discriminatory market access barriers around
the globe. U.S. negotiators must remain vigilant in their
efforts to eliminate these barriers, since they stunt the
growth of otherwise highly productive industries.
6. Digital trade in goods and services
The principal negotiating objectives for digital trade in
goods and services and cross-border data flows are:
to ensure that current trade agreement
obligations, rules, disciplines, and commitments apply
to digital trade and cross-border data flows;
to ensure that electronically delivered
goods and services are treated no less favorably than
products delivered in physical form and classified so
as to ensure the most liberal trade treatment possible;
to ensure that governments do not impede
digital trade, restrict cross-border data flows, or
require local storage or processing of data, and to
ensure that domestic regulations required by legitimate
policy objectives are the least restrictive on trade,
non-discriminatory and transparent, and promote an open
market environment; and
to extend the World Trade Organization
moratorium on duties on electronic transmissions.
Digital trade in goods and services and cross-border data
flows continues to grow in importance to the U.S. economy. U.S.
companies move data over the Internet to provide digital goods
and services to consumers around the world, as well as to
enhance competitiveness by increasing productivity,
streamlining operations, and facilitating creativity and
problem solving. It is, therefore, critical that U.S.
negotiators ensure that all trade agreement obligations, rules,
disciplines, and commitments apply to digital trade and cross
border data flows, that digitally traded goods and services
receive no less favorable treatment than comparable goods and
services, and that they are classified to ensure the most
liberal trade treatment possible.
U.S. companies depend on the free flow of data across
borders to identify market opportunities, innovate and develop
new goods and services, maintain supply chains, and serve their
customers around the globe. Unfortunately, an increasing number
of governments are considering or imposing restrictions on
cross-border data flows or requirements to store and process
data locally. This section directs negotiators to seek
provisions in trade agreements to ensure that governments
refrain from such restrictions and requirements, which are
detrimental to all sectors of the economy, including the
digital economy that is facilitated by the Internet. The
Committee expects U.S. negotiators to pursue provisions that
afford equal protection to all sectors, including financial
services.
7. Regulatory practices
The principal negotiating objectives with regard to
regulatory or other practices of foreign governments used to
reduce market access for U.S. goods, services, and investments
are:
to achieve increased transparency and
opportunity for participation in the development of
regulations;
to require proposed regulations be based on
sound science, cost benefit analysis, risk assessment,
or other objective evidence;
to improve regulatory practices and promote
increased regulatory coherence;
to seek greater openness, transparency, and
convergence of standards-development processes;
to promote regulatory compatibility through
harmonization, equivalence, or mutual recognition and
to encourage the use of global and interoperable
standards, as appropriate;
to achieve the elimination of government
measures such as price controls and reference pricing
which deny full market access for United States
products;
to ensure that government regulatory
reimbursement regimes are transparent, provide
procedural fairness, are non-discriminatory, and
provide full market access for U.S. products; and
to ensure that government collection of
undisclosed proprietary information is limited to that
necessary to satisfy a legitimate and justifiable
regulatory interest and that such information is
protected against disclosure.
Foreign government regulatory practices may effectively
constitute trade-distorting barriers that diminish or nullify
negotiated trade agreement benefits. For example, market access
for agricultural products accorded through tariff concessions
may be substantially offset by non-scientifically based health
and safety regulations that cause delay in getting the products
to consumers. The problem of laws and regulations that act as
disguised trade barriers is compounded when a government's
processes for making its laws and regulations are not open to
public view and are not receptive to public input.
While the world's economies continue to grow more
interconnected, trade flows are often disrupted by a myriad of
regulations in multiple countries that may seek the same
objectives and standard of protection, but are opaque,
duplicative, or conflicting. Such confusing, duplicative, or
incompatible regulations act as a trade barrier, and impose
significant and unnecessary costs on U.S. businesses and
consumers. Accordingly, the Committee updated these negotiating
objectives to direct U.S. negotiators to use a variety of means
to improve regulatory practices and promote increased
regulatory coherence, to improve international standards
development processes, and to promote regulatory compatibility.
There is an increasing consensus across the spectrum of
U.S. industry that binding commitments to remove or lower trade
barriers abroad can be nullified by decisions, either of
national and regional governments or industry standard setting
and accrediting bodies, that are taken as part of regulatory
processes. It has also become clear to the Committee that
regulatory reform encompasses three important prongs: (1)
transparency, including the ability of all affected parties to
participate in rule-making processes; (2) the need to ensure
that regulations are fair and that they are applied without
regard to the nationality of the industry or company affected
by them; and (3) the need to expand cooperative activities to
encourage regulatory harmonization, cooperation, and coherence.
It is the Committee's intent that each of these prongs
should be pursued while maintaining the strong levels of
protection embodied in U.S. law. To reflect this important
concept, the legislation establishes an overall negotiating
objective that ensures that the President continue to take into
account legitimate United States domestic objectives,
including, but not limited to, the protection of legitimate
health or safety, essential security, and consumer interests.
New provisions affirm that trade agreements cannot change U.S.
law without Congressional action, nor prevent the United States
from changing its law in the future, and confirm that U.S. law
prevails in the event of a conflict.
While it is taken for granted in the United States that
government processes take place in the ``sunshine'', such is
not the case in many other countries. Recent trade agreements
have encouraged greater transparency and cooperation in
regulatory processes, but the Committee believes that more
needs to be done. It is imperative that U.S. stakeholders be
given an opportunity for meaningful participation in the
developing of regulations abroad. Thus, the Committee strongly
urges USTR to pursue the negotiation of cross-cutting
transparency disciplines, particularly in the areas of
services, digital trade, and government procurement.
The Act also includes new and expanded provisions directing
the administration to seek greater openness, transparency, and
convergence of standards-development processes and encouraging
the use of international and interoperable standards. Such
concepts are particularly important for high-tech and
innovative industries.
The objectives on regulatory practices also direct U.S.
negotiators to seek the elimination of price controls and
reference pricing which deny full market access for United
States products. Under these barriers, the government of an
importing country restricts market access by arbitrarily
limiting the prices at which particular products can be sold.
Examples of measures covered under Section 7(F) with regard to
regulatory practices include the use by foreign governments of
reference pricing classification systems for Customs valuation
and other regulatory measures.
The objectives were also updated to direct negotiators to
ensure that government regulatory reimbursement regimes are
transparent, provide procedural fairness, are
nondiscriminatory, and provide full market access for United
States products. The sale of certain U.S. products, such as
pharmaceuticals and medical devices, in foreign markets very
often depends on regulatory reimbursement regimes, which decide
whether these products can be listed for reimbursement and the
amount of the reimbursement. It is critical that regulatory
reimbursement regimes make these listing and pricing decisions
in a fair and nondiscriminatory manner. It is also critical
that these reimbursement regimes provide full market access for
U.S. products, which includes setting the reimbursement amount
based on competitive, market-derived pricing or an equivalent
process, such as one that appropriately recognizes the value of
a patented product and allows the product manufacturer to apply
for an increased amount of reimbursement based on factors such
as safety and efficacy.
A growing problem around the world is foreign governments'
forcing the transfer of trade secrets and other technology from
U.S. businesses. As a condition of doing business, some foreign
governments require U.S. companies to provide them with
unnecessary information, including trade secrets and other
proprietary information. The foreign government will then steal
the proprietary information to use it to compete against U.S.
companies. Trade secrets are often among a company's core
assets and once they are stolen the impact can be devastating
for the company and for future innovation. This type of trade
secret theft threatens to diminish U.S. competitiveness around
the globe, puts American jobs at risk, and poses threats to
U.S. national security as well. This negotiating objective has
been updated to reflect the importance of this threat by
directing U.S. negotiators to ensure foreign governments
collect only undisclosed proprietary information that is
necessary to satisfy a legitimate and justifiable regulatory
interest, and protect any information collected against
disclosure.
The principal negotiating objectives of the United States
regarding regulation or other practices to reduce market access
for United States goods, services, and investments, include
ensuring that foreign governments: (i) demonstrate that the
collection of undisclosed proprietary information is limited to
that necessary to satisfy a legitimate and justifiable
regulatory interest; and (ii) protect such information against
disclosure, except in exceptional circumstances to protect the
public, or where such information is effectively protected
against unfair competition. Undisclosed proprietary information
includes all forms and types of financial, business,
scientific, technical, economic, or engineering information,
including patterns, plans, compilations, program devices,
formulas, designs, prototypes, methods, techniques, processes,
procedures, programs, or codes, whether tangible or intangible,
and whether or how stored, compiled, or memorialized
physically, electronically, graphically, photographically, or
in writing.
8. State-owned and state-controlled enterprises
The principal negotiating objective of the United States
regarding competition by state-owned and state-controlled
enterprises is to:
Eliminate or prevent trade distortions and
unfair competition; and
Ensure that the commercial activity of
state-owned and state-controlled enterprises is based
solely on commercial considerations.
The negotiating objective specifically directs U.S.
negotiators to seek disciplines in agreements that eliminate or
prevent discrimination and market-distorting subsidies and that
promote transparency.
The Bipartisan Congressional Trade Priorities and
Accountability Act of 2015 is the first time that U.S.
negotiators have been directed to eliminate trade distortions
and unfair competition by state-owned and state-controlled
enterprises (SOEs) and ensure that they act based solely on
commercial considerations. Since 2002, SOEs have increasingly
entered commercial markets. It is the view of the Committee
that U.S. trade agreements should ensure private firms are not
disadvantaged by the participation of SOEs in commercial
markets and that governments do not unfairly favor SOEs,
including through measures such as subsidies and preferential
financing, and selective regulation or enforcement of laws.
These disciplines should also address measures including
licensing requirements and discriminatory tax treatment.
9. Localization barriers to trade
The principal negotiating objective of the United States
with respect to localization barriers to trade is to eliminate
and prevent measures that require U.S. producers and service
providers to locate facilities, intellectual property, or other
assets in a country as a market access or investment condition,
including indigenous innovation measures. This new negotiating
objective reflects the view of this Committee that localization
barriers to trade are a major and increasing impediment to a
level playing field for U.S. exporters of both goods and
services, as well as investors. Forced localization of
facilities, as described in this provision, includes, but is
not limited to, forced localization of computer servers and,
thus, relates to the objectives on digital trade in goods and
services and cross-border data flows, which identify the need
for disciplines on measures that require local storage or
processing of data.
10. Labor and the environment
The principal negotiating objectives with respect to labor
and the environment are:
To ensure that a party to a trade agreement
with the United States adopts and maintains measures
implementing internationally recognized core labor
standards and its obligations under common multilateral
environmental agreements in a manner affecting trade or
investment between the United States and that party
after entry into force of a trade agreement between
those countries.
To ensure a party does not waive or
otherwise derogate from, or offer to waive or otherwise
derogate from its statutes or regulations implementing
internationally recognized core labor standards, in a
manner affecting trade or investment between the United
States and that party, where the waiver or derogation
would be inconsistent with one or more such standards,
or its environmental laws in a manner that weakens or
reduces the protections afforded in those laws and in a
manner affecting trade or investment between the United
States and that party, except as provided in its law
and provided not inconsistent with its obligations
under common multilateral environmental agreements or
other provisions of the trade agreement specifically
agreed upon.
To ensure a party does not fail to
effectively enforce its environmental or labor laws,
through a sustained or recurring course of action or
inaction in a manner affecting trade or investment
between the United States and that party after entry
into force of a trade agreement between those
countries.
To recognize that, with respect to
environment, parties to a trade agreement retain the
right to exercise prosecutorial discretion and to make
decisions regarding the allocation of enforcement
resources with respect to other environmental laws
determined to have higher priorities, and a party is
effectively enforcing its laws if a course of action or
inaction reflects a reasonable, bona fide exercise of
such discretion, or results from a reasonable, bona
fide decision regarding the allocation of resources.
To recognize that, with respect to labor,
decisions regarding the distribution of enforcement
resources are not a reason for not complying with a
party's labor obligations; a party to a trade agreement
retains the right to reasonable exercise of discretion
and to make bona fide decisions regarding the
allocation of resources between labor enforcement
activities among core labor standards, provided the
exercise of such discretion and such decisions are not
inconsistent with its obligations.
To strengthen the capacity of United States
trading partners to promote respect for core labor
standards.
To strengthen the capacity of United States
trading partners to protect the environment through the
promotion of sustainable development.
To reduce or eliminate government practices
or policies that unduly threaten sustainable
development.
To seek market access, through the
elimination of tariffs and nontariff barriers, for
United States environmental technologies, goods, and
services.
To ensure that labor, environmental, health,
or safety policies and practices of the parties to
trade agreements with the United States do not
arbitrarily or unjustifiably discriminate against
United States exports or serve as disguised barriers to
trade.
To ensure that enforceable labor and
environment obligations are subject to the same dispute
settlement and remedies as other enforceable
obligations under the agreement.
To ensure that a trade agreement is not
construed to empower a party's authorities to undertake
labor or environmental law enforcement activities in
the territory of the United States.
For purposes of the bill, the term ``internationally
recognized core labor standards'' means the core labor
standards only as stated in the ILO Declaration on Fundamental
Principles and Rights at Work and its Follow-Up (1998).
The bill also specifies the specific agreements that are
considered common multilateral environmental agreement for
purposes of the bill. Any common multilateral environmental
agreement must include both the United States and one or more
other parties to the negotiations as full parties, including
any current or future mutually agreed upon protocols,
amendments, annexes, or adjustments to such an agreement. The
common multilateral environmental agreements specified by the
bill are: the Convention on International Trade in Endangered
Species of Wild Fauna and Flora, done at Washington March 3,
1973 (27 UST 1087; TIAS 8249); the Montreal Protocol on
Substances that Deplete the Ozone Layer, done at Montreal
September 16, 1987; the Protocol of 1978 Relating to the
International Convention for the Prevention of Pollution from
Ships, 1973, done at London February 17, 1978; the Convention
on Wetlands of International Importance Especially as Waterfowl
Habitat, done at Ramsar February 2, 1971 (TIAS 11084); the
Convention on the Conservation of Antarctic Marine Living
Resources, done at Canberra May 20, 1980 (33 UST 3476); the
International Convention for the Regulation of Whaling, done at
Washington December 2, 1946 (62 Stat. 1716); the Convention for
the Establishment of an Inter-American Tropical Tuna
Commission, done at Washington May 31, 1949 (1 UST 230).
The Committee notes with satisfaction that no changes to
U.S. labor or environmental laws have been required to
implement any of the four agreements to which the May 10th
Agreement provisions have applied, and the Committee expects
that agreements considered under these trade authorities
procedures will achieve similar results.
11. Currency
The principal negotiating objective of the United States
with respect to currency practices is that parties to a trade
agreement with the United States avoid manipulating exchange
rates in order to prevent effective balance of payments
adjustment or to gain an unfair competitive advantage over
other parties to the agreement, such as through cooperative
mechanisms, enforceable rules, reporting, monitoring,
transparency, or other means, as appropriate.
The Bipartisan Congressional Trade Priorities and
Accountability Act of 2015 is the first time TPA includes a
principal negotiating objective addressing currency
manipulation. The addition of this objective reflects the
concern of the Committee that foreign countries gain an unfair
advantage by undervaluing their currency. The negotiating
objective establishes a strong standard for negotiators to
achieve in trade agreements, and provides tools--including,
where appropriate, enforceable provisions--for addressing
currency manipulation.
12. WTO and multilateral trade agreements
Recognizing that the World Trade Organization is the
foundation of the global trading system, the principal
negotiating objectives of the United States regarding the World
Trade Organization, the Uruguay Round Agreements, and other
multilateral and plurilateral trade agreements are:
To achieve full implementation and extend
the coverage of the World Trade Organization and
multilateral and plurilateral agreements to products,
sectors, and conditions of trade not adequately
covered;
To expand country participation in and
enhancement of the Information Technology Agreement,
the Government Procurement Agreement, and other
plurilateral trade agreements of the World Trade
Organization;
To expand competitive market opportunities
for United States exports and to obtain fairer and more
open conditions of trade, including through utilization
of global value chains, through the negotiation of new
WTO multilateral and plurilateral trade agreements,
such as an agreement on trade facilitation;
To ensure that regional trade agreements to
which the United States is not a party fully achieve
the high standards of, and comply with, WTO
disciplines, including Article XXIV of GATT 1994,
Article V and V bis of the General Agreement on Trade
in Services, and the Enabling Clause, including through
meaningful WTO review of such regional trade
agreements;
To enhance compliance by WTO members with
their obligations as WTO members through active
participation in the bodies of the World Trade
Organization by the United States and all other WTO
members, including in the trade policy review mechanism
and the committee system of the World Trade
Organization, and by working to increase the
effectiveness of such bodies; and
To encourage greater cooperation between the
World Trade Organization and other international
organizations.
The World Trade Organization has proven to be a successful
mechanism for nations to monitor and enforce international
trade commitments. The Committee expects our trade negotiators
to continue to use all tools available under the WTO to expand
market access for U.S. products, eliminate unjustified
nontariff barriers, and hold member nations accountable for
meeting their international trade commitments, including
through formal consultations and dispute settlement as
appropriate.
With respect to the directive to increase cooperation with
other international organizations, the Committee intends this
to include, but not be limited to, CODEX Alimentarius, World
Health Organization, Food and Agriculture Organization of the
United Nations, International Labor Organization, International
Telecommunications Union, Organization for Economic Cooperation
and Development, World Organization for Animal Health, United
Nations, United Nations Conference on Trade and Development,
United Nations Environment Program, World Bank, World Customs
Organization, and World Intellectual Property Organization.
This Committee expects increased cooperation between the WTO
and these organizations to result in increased support for and
consistency with WTO rules.
13. Trade institution transparency
The principal negotiating objective with respect to trade
institution transparency is to seek improved transparency in
the WTO, in institutions established through other trade
agreements, and in other international trade for a through:
Timely public access to information
regarding trade issues and activities of trade
institutions;
Openness by ensuring public access to
meetings, proceedings, and submissions;
Public access to all notifications and
supporting documents submitted by WTO members.
The Committee believes that the success of the WTO and
other trade institutions in setting and administering the rules
of international trade requires that these institutions operate
in transparent ways. This means that their decision making
processes must be clear and, where practicable, open to public
observation and to input by interested parties. These
principles should govern all decisions international trade
institutions make, whether in day-to-day administration,
dispute settlement, or otherwise.
The objectives regarding transparency reflect principles
that govern decision making within the institutions of the
United States and other democratic governments. Transparency
reinforces support for democratic institutions, even though
individuals may disagree with particular decisions by those
institutions.
Similarly, greater transparency will allow the WTO and
other trade institutions to build confidence that they are
operating fairly, even though individuals may disagree with
particular decisions. Just as important, greater openness
within these international institutions should encourage
greater openness within countries that are members of these
institutions. U.S. trade negotiators should seek improved
transparency, which requires that trade institutions provide
timely public access to information regarding trade issues and
institution activities, provide openness by ensuring public
access to meetings, proceedings, and submissions, and provide
public access to written submissions.
14. Anti-corruption
A strengthened principal negotiating objective of the
United States with respect to corruption affecting trade seeks
to obtain high standards and effective domestic enforcement
that prohibits attempts to influence acts, decisions, or
omissions of foreign governments or officials or to secure an
improper advantage; to ensure that such standards level the
playing field for United States persons in international trade
and investment; and to seek commitments to work jointly to
encourage and support anti-corruption and anti-bribery
initiatives in international trade fora, including through the
Convention on Combating Bribery of Foreign Public Officials in
International Business Transactions of the Organization for
Economic Cooperation and Development (OECD Convention).
The Committee is increasingly aware of the negative effects
that corruption and weak rule of law has on the ability of U.S.
companies to compete in foreign markets. Reducing corruption in
international trade and investment is fundamental to the
expansion of free and fair trade around the world. Trade is a
vital force for economic development, democratization, social
freedom, and political stability in countries struggling to
achieve these objectives. Corruption involving the use of money
and other things of value to influence acts, decisions, or
omissions of foreign government officials or to secure any
improper advantage in a manner affecting trade or investment
undermines the objectives of this legislation.
It is the Committee's view that ``high standards'' are
those that are equivalent to those established under section
30A of the Securities and Exchange Act of 1934 and sections 104
and 104A of the Foreign Corrupt Practices Act of 1977. Only
standards equivalent to these will ensure that United States
persons, who are bound by the FCPA, compete on a level playing
field.
The Committee believes it is particularly important for
U.S. trading partners to participate in and take commitments
under international anti-corruption and anti-bribery
initiatives. The negotiating objectives on anti-corruption
therefore directs U.S. trade negotiators to carefully consider
how to more effectively utilize instruments such as the OECD
Convention to advance high anti-corruption standards among our
trading partners.
15. Dispute settlement and enforcement
The principal negotiating objectives regarding dispute
settlement and enforcement are:
To seek provisions in trade agreements
providing for resolution of disputes between
governments in an effective, timely, transparent,
equitable, and reasoned manner requiring determinations
based on facts and the principles of the agreement,
with the goal of increasing compliance;
To seek to strengthen the capacity of the
WTO Trade Policy Review Mechanism to review compliance
with commitments;
To seek improved adherence by WTO dispute
settlement panels and the Appellate Body to the mandate
of those panels and the Appellate Body to apply the WTO
Agreement as written, and to apply the standard of
review in applicable WTO Agreements, including greater
deference to the fact finding and technical expertise
of national investigating authorities;
To seek provisions encouraging the early
identification and settlement of disputes through
consultations;
To seek provisions encouraging trade-
expanding compensation;
To seek provisions to impose a penalty that
encourages compliance, is appropriate to the parties,
nature, subject matter, and scope of the violation, and
has the aim of not adversely affecting parties or
interests not party to the dispute while maintaining
the effectiveness of the enforcement mechanism; and
To seek provisions that treat U.S. principal
negotiating objectives equally with respect to ability
to resort to dispute settlement and availability of
equivalent procedures and remedies.
Fair and efficient dispute settlement mechanisms are
essential to well-functioning trade agreements. An effective
dispute settlement mechanism must be capable of interpreting
the rights and obligations of disputing parties and rendering
determinations that the parties treat as binding, including
with respect to bringing national measures into compliance with
trade agreements when a measure of a party is found to be
inconsistent with its commitments under an international trade
agreement.
In order to be effective, a dispute settlement mechanism
must maintain the trust of the parties that it is faithfully
adhering to--and not adding to or diminishing--the rights and
obligations of the parties to the agreement. A dispute
settlement mechanism must therefore render equitable and
reasoned decisions, based on the facts of cases presented and a
faithful interpretation of agreements.
The Committee has previously expressed concern with the
standard of review that dispute settlement panels and the WTO
Appellate Body have applied in cases involving measures taken
by administrative agencies of the United States, in particular,
the U.S. International Trade Commission and the Department of
Commerce. Those concerns remain. The Committee is also
concerned that WTO Appellate Body has made findings that appear
to go beyond directly resolving the dispute before it, and at
times making findings that appear to go beyond the text of the
WTO Agreement by giving meaning to text that, interpreted
properly, reflects the decision by WTO Members to not create an
obligation with respect to certain measures.
The Committee considers that the long-term effectiveness of
the WTO dispute settlement mechanism depends on WTO dispute
settlement panels and the Appellate Body faithfully adhering to
Articles 3.2 and 19.2 of the WTO Understanding on Rules and
Procedures Governing the Settlement of Disputes, which state
that the recommendations and rulings of the WTO Dispute
Settlement Body ``cannot add to or diminish the rights and
obligations provided in the [WTO] agreements.'' The negotiating
objective directs U.S. negotiators to ensure that the WTO
dispute settlement mechanism meets this standard, and to
negotiators should address any systemic failure to do so.
16. Trade remedy laws
The principal negotiating objective with respect to trade
remedies are:
to preserve the ability to enforce
rigorously U.S. trade laws, including antidumping,
countervailing duty, and safeguard laws;
to avoid agreements that lessen the
effectiveness of unfair trade disciplines or safeguards
provisions to ensure that U.S. workers, agricultural
producers, and firms can compete fully on fair terms
and enjoy the benefits of reciprocal trade concessions;
and
to address and remedy market distortions
that lead to dumping and subsidization.
The trade remedy laws of the United States provide firms
the means to ensure that they and their workers are not harmed
by unfair trade practices of U.S. trading partners. The
Committee considers that the laws are essential for allowing
U.S. firms to participate fairly in international trade, and
that U.S. trade remedy laws help to maintain support for trade
liberalization. U.S. trade negotiators should, therefore,
ensure that trade agreements do not weaken the enforcement or
the effectiveness of U.S. trade remedy laws.
17. Border taxes
The principal negotiating objective regarding border taxes
is to obtain a revision of the WTO rules with respect to the
treatment of border adjustments for internal taxes to redress
the disadvantage to countries relying primarily on direct taxes
for revenue rather than indirect taxes. The principle
negotiating objective regarding border taxes directs U.S.
negotiators to seek a revision of WTO rules that will eliminate
the current disadvantage to countries, such as the United
States, that rely primarily on direct taxes (such as income
taxes), rather than indirect taxes (such as sales and value-
added taxes), and that tax income on a worldwide rather than a
territorial basis. WTO subsidy rules as interpreted by dispute
settlement panels and the Appellate Body give rise to a
disparity that favors territorial tax jurisdictions over
worldwide tax jurisdictions. The view of the Committee is that
this disparity must be corrected to preserve the sovereign
right of every country to choose its own rules of taxation.
18. Textile negotiations
The principal negotiating objectives of the United States
with respect to trade in textiles and apparel articles are to
obtain competitive opportunities for United States exports of
textiles and apparel in foreign markets substantially
equivalent to the competitive opportunities afforded foreign
exports in United States markets and to achieve fairer and more
open conditions of trade in textiles and apparel.
The negotiating objectives seek to promote the export of
U.S. made products. In 2013, approximately one-third of U.S.
textile production was exported, with a value of $17.8 billion.
More than half of this output was shipped to Western Hemisphere
nations that are members of the North American Free Trade
Agreement (NAFTA), the Dominican Republic-Central America Free
Trade Agreement (CAFTA-DR), and the Caribbean Basin Initiative
(CBI). Exports to the NAFTA and CAFTA-DR countries contributed
to a U.S. trade surplus of $2.4 billion in yarns and fabrics in
2013. The strong markets for U.S. yarn and fabric in free trade
agreement countries underscores the importance of the
negotiating objective.
The textiles and apparel sector is highly integrated into
international supply chains, many of which originate in the
United States. The objective supports expanded participation in
global value chains and seeks to ensure that trade agreements
reflect the increasingly interrelated and multi-sectoral nature
of trade and investment activity. Many of the world's largest
apparel retailing and marketing firms are headquartered in the
United States, where countless functions related to apparel are
done domestically, such as design, branding, and marketing of
finished products. By some estimates, nearly 70 percent of the
value of a garment imported into the United States stays in the
U.S. economy, supporting high-skill and high-pay jobs. As
negotiations on textiles and apparel are undertaken, supply
chains and support for new job growth in the United States
should remain a significant goal.
19. Commercial partnerships
The principal negotiating objective of the United States
with respect to an agreement under the Transatlantic Trade and
Investment Partnership countries regarding commercial
partnerships is:
To discourage actions by potential trading
partners that directly or indirectly prejudice or
otherwise discourage commercial activity solely between
the United States and Israel;
To discourage politically motivated actions
to boycott, divest from, or sanction Israel and to seek
the elimination of politically motivated nontariff
barriers on Israeli goods, services, or other commerce
imposed on Israel.
To seek the elimination of any boycott
fostered or imposed by a foreign country against Israel
and compliance with the Arab League Boycott of Israel
by prospective trading partners.
Congress has previously expressed its sense that the Arab
League Boycott of Israel is an impediment to peace in the
region and to United States investment and trade in the Middle
East and North Africa, and that the boycott should be
immediately terminated. (See the Consolidated Appropriations
Act of 2014, P.L. 113-76). The Committee is concerned about
support by potential trading partners of politically-motivated
boycotts of, divestments from, sanctions of, or other
discriminatory economic actions against Israel. The Committee
is particularly concerned by retaliatory or discriminatory
actions taken against U.S. businesses for the sole reason that
the U.S. business has commercial ties with Israel. Such actions
impair the ability of U.S. firms to export goods and services,
and directly invest in foreign markets. The Committee therefore
considers that negotiators should seek to ensure that
Transatlantic Trade and Investment Partnership countries do not
prejudice the ability of U.S. firms to engage in commercial
activity in Israel or with Israeli persons, and that
Transatlantic Trade and Investment Partnership countries do not
support or engage in politically-motivated actions to boycott,
divest from, or sanction Israel, or take other politically-
motivated nontariff barriers to Israeli commerce.
20. Good governance, transparency, the effective operation
of legal regimes, and the rule of law of trading
partners
The Bipartisan Congressional Trade Priorities and
Accountability Act of 2015, for the first time, establishes
principal negotiating objectives of the United States with
respect to ensuring implementation of trade commitments and
obligations by strengthening good governance, transparency, the
effective operation of legal regimes and the rule of law of
U.S. trading partners through capacity building and other
appropriate means. These objectives are important parts of the
broader effort to create more open democratic societies and to
promote respect for internationally recognized human rights.
Through these negotiating objectives, the Committee emphasizes
that the effective implementation of and adherence to trade
agreement obligations contribute to broader policy goals of the
United States, such as the promotion of democracy and respect
for internationally recognized human rights.
The Committee understands that the Transpacific Partnership
negotiations will seek to achieve this negotiating objective
through rules on good governance, including the promotion of
greater transparency, participation, and accountability in the
development of regulations and other government decisions,
including by promptly publishing laws, regulations,
administrative rulings of general application, and other
procedures that affect trade and investment, and providing
opportunities for stakeholder comment on measures before they
are adopted and finalized; and through commitments discouraging
corruption and establishing codes of conduct to promote high
ethical standards among public officials.
Section 2(c). Capacity building and other priorities
The Bipartisan Congressional Trade Priorities and
Accountability Act of 2015 establishes for the first time
priorities related to capacity building for U.S. trading
partners as a means of addressing and maintaining U.S.
competitiveness in the global economy. Section 2(c) directs the
heads of relevant Federal agencies to work to strengthen the
capacity of U.S. trading partners to carry out obligations
under trade agreements by consulting with any country seeking a
trade agreement with the United States concerning that
country's laws relating to customs and trade facilitation,
sanitary and phytosanitary measures, technical barriers to
trade, intellectual property rights, labor, and the
environment, and to provide technical assistance if needed. It
is the Committee's expectation that capacity building be
directed to each of these elements. Relevant Federal agencies
are also directed to seek to establish consultative mechanisms
to strengthen the capacity of U.S. trading partners to develop
and implement standards for the protection of the environment
and human health based on sound science, and to promote
consideration of multilateral trade agreements. The agencies
are also to submit to the Committee on Finance of the Senate
and the Committee on Ways and Means of the House of
Representatives an annual report on capacity-building
activities undertaken in connection with trade agreements.
Section 3. Trade agreements authority
Section 3 provides that the President may enter into trade
agreements subject to the trade authorities procedures
prescribed in the present bill before July 1, 2018 or, if such
procedures are extended as provided in section 3(c), before
July 1, 2021.
Section 3 contains two different procedures for
implementing trade agreements. The first procedure pertains to
implementing the results of certain tariff-only negotiations;
the second procedure pertains to implementing all the results
of other tariff negotiations, as well as other changes to U.S.
law required by trade agreements.
Section 3(a). Tariff proclamation authority
Section 3(a) contains the first of these two procedures,
commonly referred to as ``tariff proclamation authority.''
Tariff proclamation authority permits the President to proclaim
the results of certain tariff negotiations and commitments
directly into U.S. law, without need for separate legislation.
The President must notify Congress of his intention to enter
into an agreement under section 3(a). One recent example of a
commitment result that would fall within this authority is the
commitment the United States is undertaking through APEC to
reduce its tariffs on certain environmental goods to no more
than 5% by the end of 2015.
Section 3(a) imposes limits on the President's tariff
proclamation authority: where a current duty rate exceeds 5
percent ad valorem, the President would not be authorized to
reduce it by more than 50 percent. Any greater reduction would
have to be approved by Congress. Where a current duty rate is 5
percent ad valorem or less, the President may reduce it or
eliminate it without separate congressional approval.
An additional restriction on proclamation authority
pertains to tariffs on certain import-sensitive agricultural
products. The President may not proclaim reductions of tariff
rates on such products below the rates applicable under the
Uruguay Round Agreements. Products subject to this restriction
are those agricultural products as to which the U.S. rate of
duty was lowered by no more than 2.5 percent on the day the WTO
Agreements went into effect (January 1, 1995). Tariff
reductions on these products must be approved in separate
legislation, described in section 3(b).
Finally, the President may not, by proclamation, increase
any rate of duty above the rate applied on the date this bill
is enacted. Any such increases would require separate
legislation.
To the extent that tariff reductions may be implemented by
proclamation, the bill requires that, in general, such
reductions take place in stages. The stages may vary in size
from period to period. However, the aggregate reduction in
place at any given time may not exceed the aggregate reduction
that would have been in place if, beginning on the date an
agreement is implemented, tariffs had been reduced in equal
annual stages of the greater of either 3 percent ad valorem, or
one-tenth of the total reduction. The bill permits the
President to round numbers off, within limits, to simplify
staging calculations.
An exception to the staging requirements is made where the
U.S. International Trade Commission determines that there is no
domestic production of an article.
Finally, the bill reaffirms the residual proclamation
authority granted to the President in section 111(b) of the
Uruguay Round Agreements Act (``URAA''). That provision
authorizes the President to proclaim certain tariff rate
changes for articles that were the subject of duty elimination
or harmonization negotiations during the Uruguay Round of
multilateral trade negotiations.
The present bill (in section 3(a)(7)) also grants the
President authority to modify any duty or the staged rate
reduction of any duty, pursuant to a reciprocal elimination or
harmonization of duties under the auspices of the WTO,
regardless of whether the sector at issue had been subject to
duty elimination or harmonization negotiations during the
Uruguay Round. This authority is not subject to the ordinary
limitations on the scope of proclaimed tariff reductions, the
prohibition on proclaimed tariff increases, and the staging
rules. However, this authority may not be used to proclaim the
reduction or elimination of tariffs on import sensitive
agricultural products as provided for in section 3(a)(3)(B).
Tariff reductions proclaimed under section 3(a)(7) of the
present bill, like tariff reductions proclaimed under section
111(b) of the URAA, are subject to the layover and consultation
requirements prescribed by section 115 of the URAA. That is,
the President must receive advice from the appropriate industry
advisory committee and the ITC on the proposed proclamation,
and the proclamation must lie before the Senate Finance and
House Ways and Means Committees for a period of 60 days before
going into effect, in order to give the Committees an adequate
opportunity to consult with the President on the proposed
changes.
Section 3(b). Agreements on tariff and nontariff barriers
The second procedure for implementing trade agreements is
found in Section 3(b) and is commonly referred to as ``trade
authorities procedures.'' Section 3(b)(1) authorizes the
President to enter into a trade agreement with a foreign
country when the President determines that any duty or other
import restriction, or any other barrier to or distortion of
international trade, unduly burdens or restricts the foreign
trade of the United States or adversely affects the U.S.
economy, or that the imposition of any such barrier or
distortion is likely to result in such a burden, restriction,
or effect, and that entering into such agreement will promote
the purposes, policies, priorities and objectives of this bill.
The agreement must provide for the reduction or elimination of
such duty, barrier or other distortion or prohibit or limit the
imposition of such a barrier or distortion.
Conditions. Section 3(b)(2) provides that the trade
agreement approval procedures may be used only if the agreement
makes progress in meeting the applicable objectives set forth
in sections 2 (a) and (b) (Overall and Principal Trade
Negotiating Objectives), and the President satisfies the
requirements set forth in sections 4 and 5 (Congressional
Oversight, Consultations, and Access to Information and Notice,
Consultations, and Reports).
Bills qualifying for trade authorities procedures. Section
3(b)(3) provides that bills implementing trade agreements
qualify for trade authorities procedures only if those bills
consist solely of provisions approving the trade agreement and
any statement of administrative action accompanying the
agreement, and provisions strictly necessary or appropriate to
implement the trade agreement.
If the foregoing conditions are met, then the trade
authorities procedures described in section 151 of the Trade
Act of 1974 apply to the implementing bill. Section 151 of the
Trade Act of 1974 sets forth a timetable for consideration of
implementing bills in the Committees of jurisdiction and on the
floor of each House of Congress. Ordinarily, the maximum time
for consideration in both Chambers will be 90 legislative days.
Section 151 also prohibits amendments to implementing bills and
limits the time for debate on the floor of each House to 20
hours (subject to further limitation).
The Committee intends to extend authority to the President
to negotiate agreements subject to the trade authorities
procedures similar to that given to past Presidents. The
Committee also intends to provide the President with the
flexibility needed to negotiate strong trade agreements.
However, the Committee believes that for constitutional
reasons, it is important to make trade authorities procedures
as tailored as possible, so as not to unnecessarily intrude on
normal legislative procedures. Trade authorities procedures are
exceptions to the ordinary rules of procedure, which are
permitted only because of the co-equal status that the
executive and legislative branches share in the area of trade.
The President and Congress both have important powers with
respect to trade and foreign affairs issues. Therefore, trade
agreements do not readily fit the legislative model used to
consider other types of legislation. Trade authorities
procedures assure that trade relations with other countries are
handled expeditiously and efficiently, with the involvement of
the executive and legislative branches.
The Committee believes that these procedures should apply
only to meet the special requirements of trade agreements.
Further, the trade authorities procedures should apply only to
those provisions in an implementing bill that are strictly
necessary or appropriate to implement the underlying agreement,
as stated in the Senate Finance and House Ways and Means
Committee reports accompanying the Trade Act of 2002. It is the
Committee's intent that this authority is consistent with prior
grants of authority. While the Committee considers that
implementing bills introduced since the 2002 Act have met this
standard, there are disagreements about some aspects of bills
prior to 2002. As has been recognized in the past, to apply the
procedures more broadly would encroach on Congress's
constitutional authority to legislate. The Committee continues
to take a strict interpretation of this requirement.
Time period. Sections 3(a)(1)(A) and 3(b)(1)(C) grant trade
promotion authority for agreements entered into before July 1,
2018. An extension until July 1, 2021 would be permitted unless
Congress passed a disapproval resolution, as described under
section 3(c). New language is included in the bill to clarify
that any substantial modifications or substantial additional
provisions of a trade agreement entered after July 1, 2018 (or
July 1, 2021 if trade authorities procedures are extended),
shall not be eligible for approval under trade authorities
procedures. This will ensure that trade agreements are
concluded only within the time frame authorized by Congress and
that substantial modifications or additions after that date are
not eligible for approval under trade authorities procedures.
Extension procedures. Section 3(c) outlines a process for
extending the tariff proclamation authority of section 3(a) and
the trade authorities procedures of section 3(b). Under this
process, the President must request the extension from Congress
and provide his reasons for that request, along with an
explanation of the trade agreements for which he expects to
need fast track authority, and a description of the progress he
has made to date toward achieving the purposes, policies,
priorities, and objectives of the present bill. The President
must promptly notify an extension request to the Advisory
Committee for Trade Policy and Negotiations established under
section 135 of the Trade Act of 1974, which then must file its
own report with Congress. The President also must promptly
notify the International Trade Commission of his request for an
extension. The International Trade Commission must file a
report that contains a review and analysis of the economic
impact on the United States of all trade agreements implemented
between the date of enactment of this bill and the date upon
which the President requests an extension.
Consistent with prior law, the President's request for an
extension to July 1, 2021 will be granted, unless either House
of Congress passes a ``resolution of disapproval.'' Any Member
of Congress may introduce such a resolution in his or her
respective House of Congress. Such a resolution will be
referred, in the Senate, to the Committee on Finance, and in
the House, jointly to the Committee on Ways and Means and the
Committee on Rules. Floor action on such a resolution will not
be in order unless the resolution is reported by the
aforementioned committees.
In the event the Committee on Finance reports an extension
disapproval resolution, the resolution will be considered on
the Senate floor under the expedited procedures set forth in
section 152(e) of the Trade Act of 1974. In the event the
Committee on Ways and Means and the Committee on Rules report
an extension disapproval resolution, the resolution will be
considered on the House floor under the expedited procedures
set forth in section 152(d) of that Act.
Commencement of negotiations. In order to contribute to the
continued economic expansion of the United States, section 3(d)
directs the President to commence negotiations covering tariff
and nontariff barriers where the President determines that such
negotiations are feasible, timely, and would benefit the United
States. In doing so, the President must take into account all
of the trade negotiating objectives set out in section 2.
Section 4. Congressional oversight, consultations, and access to
information
The Bipartisan Congressional Trade Priorities and
Accountability Act of 2015 significantly strengthens the
requirements on consultations and access to information the
President must meet with respect to Congress and the public
both during trade negotiations and before a trade agreement may
enter into force. Section 4 contains new consultation and
information sharing provision, establishing additional
requirements not previously set out in trade promotion
authority legislation. The enhanced consultation requirements
of this section reflect the necessity of close and regular
legislative-executive consultation and coordination to ensure
that, during negotiations, the President seeks to achieve the
trade negotiating objectives set out in section 2. Close
consultation and coordination by the President with Congress
during negotiations increases the likelihood that Congress will
support a trade agreement concluded by the President. If the
President fails to meet these new and expanded consultation
requirements, and the requirements of sections 5 and 6 of the
bill (discussed below), Congress can disallow application of
trade authorities procedures to a bill implementing a trade
agreement through a procedural disapproval resolution or a
consultation and compliance resolution.
Section 4(a). Consultation with Members of Congress
Section 4(a) establishes new consultation requirements the
United States Trade Representative must meet during
negotiations and prior to a trade agreement entering into
force. The bill for the first time requires the United States
Trade Representative to meet upon request with any Member of
Congress and provide pertinent documents relating to the
negotiations, including classified materials. The Committee
expects that these consultations will be held promptly and that
they will be responsive in scope to the Member's request. The
United States Trade Representative must consult closely with
the Committee on Finance of the Senate, and the Committee on
Ways and Means of the House of Representatives, and with
respect to negotiations relating to agricultural trade, the
Committee on Agriculture, Nutrition, and Forestry of the
Senate, and the Committee on Agriculture of the House of
Representatives. The United States Trade Representative must
also consult closely with the Congressional Advisory Groups on
Negotiations (discussed further below). While previous versions
of TPA required close consultations with this Committee, the
Committee specifically intends that these consultations and the
sharing of negotiating text will be expansive in scope and as
detailed as feasible. Such consultations must be meaningful and
timely, including consulting on negotiating positions before
those positions are shared with cleared advisors or our trading
partners.
For the first time, the bill establishes consultation
requirements for the Administration to follow when determining
whether to bring an agreement into force. Before a trade
agreement enters into force, the United States Trade
Representative must consult with Members of Congress,
committees of jurisdiction, and the Congressional Advisory
Groups and keep them fully apprised of the measures a trading
partner has taken to comply with the provisions of the trade
agreement. The Committee expects the Administration to maintain
the same level of detailed and timely consultations prior to
entry into force as it maintains in other stages of the
negotiations.
Additionally, within 120 days after this bill is enacted,
the United States Trade Representative will be required, in
consultation with the chairmen and ranking members of the
Committee on Finance of the Senate and the Committee on Ways
and Means of the House of Representatives, to develop written
guidelines on enhanced coordination with Congress. The
guidelines will establish procedures to ensure timely briefings
with any Member of Congress and the sharing of information,
including documents and classified information, with Members of
Congress, and their staff with proper security clearances as
appropriate, as well as cleared Committee staff as appropriate
in light of Committee responsibilities. The Committee intends
to play a substantial and meaningful role in the development
and finalization of these guidelines.
The expanded requirements set out in this section regarding
the sharing of text with Members and appropriate staff reflects
the importance of detailed engagement with Members to ensure
that trade agreements reflect the priorities set out in this
bill. The bill provides that staff members are entitled to
receive information regarding trade negotiations, while
acknowledging security clearances may be required of staff
where classified information is being reviewed. It is the
expectation of the Committee that the United States Trade
Representative will carefully monitor its classification
procedures to ensure that material is not overclassified. The
Committee expects that consultations and the sharing of text
will be prompt and responsive in scope to the Member's request.
Section 4(b). Designated congressional advisers
Designated congressional advisers are any Members of
Congress so designated, in the Senate, by the President pro
tempore, in consultation with the chairman and ranking member
of the Committee on Finance, and in the House of
Representatives, by the Speaker of the House, in consultations
with the chairman and ranking member of the Committee on Ways
and Means. The United States Trade Representative must consult
closely with any congressional adviser so designated.
Additionally, the United States Trade Representative, on behalf
of the President, must accredit designated congressional
advisers as official advisers to the United States delegation
to international conferences, meetings, and negotiating
sessions relating to trade agreements.
Section 4(c). Congressional advisory groups on negotiations
Section 4(c) establishes the Senate and House Advisory
Groups on Negotiations. The membership of the Senate Advisory
Group on Negotiations is to be comprised of the chairmen and
ranking member of the Committee on Finance, and three
additional members of the Committee (with no more than two from
the same political party), plus the chairman and ranking member
of any committee with jurisdiction over provisions of law
affected by a trade agreement. The House Advisory Group on
Negotiations would be similarly comprised. Members of the
Senate and House Advisory Groups on Negotiations will be
accredited by the United States Trade Representative, on behalf
of the President, as official advisers to the United States
delegation in negotiations for any trade agreement subject to
trade authorities procedures. Section 4(c) further provides
that the House and Senate Advisory Groups on Negotiations will
consult with and provide advice to the United States Trade
Representative regarding the formulation of specific
objectives, negotiating strategies and positions; the
development of the applicable trade agreement; and the
compliance with and enforcement of the negotiated commitments
under the trade agreement.
Within 120 days after this bill is enacted, the United
States Trade Representative will be required, in consultation
with the chairmen and ranking members of the Committee on
Finance of the Senate and the Committee on Ways and Means of
the House of Representatives, to develop written guidelines to
facilitate the exchange of information with the House and
Senate Advisory Groups on Negotiations. The guidelines will
establish procedures concerning detailed briefings on a fixed
timetable; access to pertinent documents, including classified
materials; coordination between the United States Trade
Representative and the House and Senate Advisory Groups on
Negotiations, including at negotiation sites; and, after a
trade agreement has been concluded, ongoing compliance and
enforcement efforts. The Committee intends to play a
substantial and meaningful role in the development and
finalization of these guidelines.
Section 4(d) and 4(e). Consultations with the public and
with advisory committees
Within 120 days after this bill is enacted, the United
States Trade Representative, in consultation with the chairmen
and ranking members of the Committee on Finance of the Senate
and the Committee on Ways and Means of the House of
Representatives, is to develop guidelines on public access to
information regarding negotiations with the purpose of
facilitating transparency, encouraging public participation,
and promoting collaboration. Also within 120 days, the United
States Trade Representative, in consultation with the chairmen
and ranking members of the Committee on Finance of the Senate
and the Committee on Ways and Means of the House of
Representatives, is to develop guidelines regarding the
advisory committees established under section 135 of the Trade
Act of 1974. The guidelines are to ensure timely briefings and
regular opportunities to provide input, and the sharing of
detailed and timely information regarding negotiations,
including pertinent documents. The Committee intends to play a
substantial and meaningful role in the development and
finalization of these guidelines.
Section 4(f). Establishment of Chief Transparency Officer
in the Office of the United States Trade
Representative
The bill amends Section 141(b) of the Trade Act of 1974 to
create a Chief Transparency Officer at the Office of the United
States Trade Representative with the responsibility of
consulting with Congress regarding transparency policy,
coordinating transparency in trade negotiations, engaging and
assisting the public, and advising the United States Trade
Representative on transparency policy. The addition of this
requirement reflects the importance the Committee places on
ensuring transparent engagement with the public and the role of
Congress in overseeing USTR transparency policies.
Section 5. Notice, consultations, and reports
Section 5 of the Bipartisan Congressional Trade Priorities
and Accountability Act of 2015 establishes procedures for
consultations between Congress and the President before
negotiations on a trade agreement commence, during
negotiations, and before a trade agreement enters into force.
The purpose of the requirements established under section 5 is
to help ensure close coordination and consultation at every
stage of trade agreement negotiation.
Section 5(a)(1) requires the President to provide written
notice to Congress at least 90 calendar days prior to entering
into negotiations with a country. In the notice, the President
must set forth the date on which he intends to initiate
negotiations, the specific objectives for the negotiations, and
whether the President intends to seek a new agreement, or to
change an existing agreement. Failure to provide notice may
trigger the introduction and consideration of a procedural
disapproval resolution or a consultation and compliance
resolution under the provisions of section 6(b). If a
procedural disapproval resolution or a consultation and
compliance resolution were adopted, it would withdraw trade
authorities procedures for legislation implementing the
agreement at issue. The Committee intends that consultations
should be robust and meaningful and that the Administration
consult closely with Congress during the exploratory phase. The
Committee believes that it is essential that the United States
not join a consensus in favor of a new entrant to an agreement
that is already being negotiated if that entrant is not willing
and able to live up to the standard of the agreement, or if its
entry would negatively affect, rather than advance, U.S.
objectives of the agreement.
Section 5(a)(1)(B) requires the President to consult with
relevant Committees, and the Congressional Advisory Groups on
Negotiations, regarding the negotiations before and after
formal submission of the notice of intention to negotiate.
Section 5(a)(1)(C) requires the President, upon the request of
a majority of the members of either the House or Senate
Advisory Group on Negotiations, to meet with the requesting
advisory group before initiating negotiations or at any other
time concerning the negotiations. Section 5(a)(1)(D) requires,
for the first time, that the United States Trade Representative
will publish, at least 30 calendar days before initiating
negotiations with a country, a detailed and comprehensive
summary of the objectives with respect to the negotiations, and
thereafter regularly update the summary, as appropriate.
Section 5(a)(2) establishes a special consultation
requirement before the President initiates negotiations with a
country concerning tariff reductions in agriculture. The
provision requires the President to assess whether U.S. tariffs
on agricultural products that were bound under the Uruguay
Round Agreements are lower than the tariffs bound by that
country. In his assessment, the President is also required to
consider whether the tariff levels bound and applied throughout
the world with respect to imports from the United States are
higher than U.S. tariffs on like products, and whether the
negotiation provides an opportunity to address any such
disparity.
The President is required to consult with the Committees on
Ways and Means and Agriculture of the House, and the Committees
on Finance and Agriculture, Nutrition, and Forestry of the
Senate, concerning the results of this assessment, whether it
is appropriate for the United States to agree to further tariff
reductions under such circumstances, and how all applicable
negotiating objectives will be met.
Section 5(a)(2)(B) sets forth special consultation
procedures for import-sensitive agricultural products. It
requires the United States Trade Representative, before
initiating agriculture negotiations, to identify import-
sensitive agricultural products, and consult with the Committee
on Ways and Means and the Committee on Agriculture of the House
of Representatives, and the Committee on Finance and the
Committee on Agriculture, Nutrition, and Forestry of the Senate
concerning whether further tariff reductions on these products
would be appropriate, whether these products face unjustified
sanitary and phytosanitary restrictions, and whether the
countries participating in the negotiations maintain export
subsidies or other programs that distort world trade in these
products. The United States Trade Representative also must
request that the International Trade Commission prepare an
assessment of the probable economic effect of any tariff
reduction on the U.S. industry producing an import-sensitive
agricultural product. After complying with these provisions,
the United States Trade Representative must notify the
aforementioned Committees of his or her intention to seek
tariff liberalization in the identified products. Further, if
during the course of negotiations additional import-sensitive
agricultural products become candidates for tariff reductions,
the United States Trade Representative must notify the
aforementioned Committees promptly and explain the reasons for
seeking the proposed tariff reductions.
Section 5(a)(3) requires the President, before initiating
or continuing negotiations directly related to fish or
shellfish trade, to consult with the Committee on Ways and
Means and the Committee on Resources of the House of
Representatives, and the Committee on Finance and the Committee
on Commerce, Science, and Transportation of the Senate and to
keep these Committees apprised of negotiations on an ongoing
and timely basis.
Section 5(a)(4) sets forth a special consultation
requirement for negotiations regarding textiles. Before
initiating trade negotiations with a country, the bill requires
the President to assess whether U.S. textile and apparel
tariffs bound under the Uruguay Round Agreements are lower than
tariffs bound by that country, and whether the negotiation
affords an opportunity to address that disparity. The President
then must consult with the House Ways and Means Committee and
the Senate Finance Committee about his assessment, whether the
United States should agree to further textile and apparel
tariff reductions, and how all applicable negotiating
objectives will be met.
The Committee believes that a country's demonstrated
commitment, and demonstrated ability, to meet its current
international trade and investment commitments is an important
factor that should have a strong bearing on whether a
prospective trading partners is ready and able to undertake
trade obligations which will reflect the higher standards that
a reciprocal trade agreement with the United States requires.
Therefore, section 5(a)(5) requires the President, in
determining whether to enter into a trade agreement with a
particular country, to take into account the extent which the
country has implemented its international trade and investment
commitments to the United States.
Section 5(b) sets forth consultation requirements the
President must meet before entering into an agreement. The
President, before entering into any trade agreement, must
consult with the relevant Committees and the Congressional
Advisory Groups on Negotiations concerning the nature of the
agreement; how and to what extent the agreement will achieve
the applicable purposes, policies, and objectives set forth in
section 2; and all matters relating to implementation under
section 6, including the general effect of the agreement on
U.S. laws.
Under section 5(b)(3), at least 180 calendar days before
entering into a trade agreement, the President must notify the
House Committee on Ways and Means and the Senate Committee on
Finance of any proposals that may be in the final agreement
that could require changes to the antidumping, countervailing
duty, or safeguard laws of the United States. At any time after
receiving the report from the President, either Chamber of
Congress may consider a resolution finding that the proposed
changes to U.S. trade remedy laws are inconsistent with the
negotiating objectives set out in section 2(b)(16).
Section 5(c) requires the President, at least 90 days
before entering into a trade agreement, to ask the
International Trade Commission to assess the agreement,
including the likely impact of the agreement on the U.S.
economy as a whole, specific industry sectors, and U.S.
consumers. The ITC's report of its assessment must be
transmitted to Congress and the President not later than 105
days from the date on which the President enters into the
agreement. For the first time the report is required to be made
public in the interest of greater transparency.
Section 5(d)-(f) sets out reports that the President must
submit to Congress with a trade agreement. The reports consist
of an environmental review, an employment impact review, and a
meaningful labor rights report on country with which the
President is negotiating along with a detailed and
comprehensive description of any provision that would require
changes to the labor laws and labor practices of the United
States. The reports are to be submitted to the Committee on
Ways and Means of the House and the Committee on Finance of the
Senate, and are to be made public.
The President, at the same time he submits a copy of the
final legal text to Congress, is also required to submit to
Congress a plan for implementing and enforcing the agreement,
including descriptions of additional personnel required at
border entry points, additional personnel required by Federal
agencies responsible for monitoring and implementing the trade
agreement, additional equipment and facilities needed by U.S.
Customs and Border Protection, and the impact the trade
agreement will have on State and local governments, with an
analysis of the cost of each.
The President must also submit, not later than one year
after the United States imposes a penalty or remedy permitted
by a trade agreement, a report on the effectiveness of the
remedy, including whether the remedy was effective in changing
the behavior of the targeted party and whether the remedy had
any adverse impact on U.S. entities. The United States
International Trade Commission, not later than one year after
the date of the enactment of this Act, and not later than 5
years thereafter, is to submit a report on the economic impact
on the United States of all trade agreements with respect to
which Congress has enacted an implementing bill under trade
authorities procedures since January 1, 1984. Prior to
preparing these reports, it is expected that the International
Trade Commission will consult with this Committee regarding the
appropriate methodology to be used for purposes of these
reports, and possible new approaches. The Committee expects
that these reports will provide greater information and
analysis about the benefits of trade agreements to the U.S.
economy.
The Committee believes it needs to be fully informed of the
actions the Administration is taking to enforce obligations
under the trade agreements. Therefore the bill requires the
United States Trade Representative to consult with the
Committee on Ways and Means of the House and the Committee on
Finance of the Senate after acceptance of a petition for review
or taking an enforcement action in regard to an obligation
under a trade agreement, including a labor or environmental
obligation. The Committee expects to be fully informed
regarding the nature of the enforcement action, including the
legal basis on which it is predicated, as part of these
consultations.
Section 6. Implementation of Trade Agreements
Section 6 sets forth conditions the President must meet for
a trade agreement entered into under trade authorities
procedures to enter into force, and establishes the conditions
under which Congress may withdraw the application of trade
authorities procedures to a trade agreement and the procedures
for doing so.
Section 6(a) specifies the documentation that the President
must transmit to Congress to enable Congress to make a fully
informed decision as to whether to approve a trade agreement.
The requirement set out here complements the various
requirements that the President consult with Congress during
the course of an agreement's negotiation. Consultation during
negotiation, combined with a complete accounting after
negotiation, will enable Congress to participate in the trade
policymaking process to the fullest extent of its
constitutional authority.
At least 90 days before entering into a trade agreement
subject to this bill, the President must notify Congress of his
intention to enter into the agreement and publish notice of
that intention in the Federal Register. For the first time, the
President, at least 60 days before entering into the agreement,
must publish the text of the agreement on the website of the
Office of the United States Trade Representative. Within 60
days after entering into the agreement, the President must
transmit to Congress a description of changes to U.S. law he
believes would be necessary to bring the United States into
compliance with the agreement. At least 30 days before
submitting to Congress the materials required by the bill to
accompany the submission to Congress of the final legal text of
the agreement (i.e., the complete agreement, including any
legal and technical corrections and clarifications made
subsequent to the publication of the text on the USTR website),
the President is to submit to Congress a draft statement of any
administrative action proposed to implement the agreement, and
a copy of the final legal text of the agreement.
Collectively, these provisions help ensure that Congress is
given adequate time and documentation to fully understand a
trade agreement subject to this bill and inform the
consideration of legislation to implement that agreement. In
particular, by making the text of the agreement public 60 days
before the President enters into the agreement, the public will
have time to examine the agreement and inform Congress of their
views. Furthermore, by requiring the receipt of a draft
statement of administrative action and a copy of the final
legal text of the agreement at least 30 days before the
President provides the final legal text of the agreement to
Congress, the bill ensures Congress will have adequate time to
review the agreement and develop implementing legislation
before the timeline for the consideration of implementing
legislation set out in section 151 of the Trade Act of 1974
begins.
Before Congress considers a bill implementing a trade
agreement, the President must submit to Congress, on a day on
which both Houses of Congress are in session: (1) the final
legal text of the agreement, (2) a draft bill to implement the
agreement; (3) a statement of administrative action proposed to
implement the agreement; and (4) additional supporting
information (described in greater detail, below).
It is the expectation of the Committee that, for any
agreement subject to trade authorities procedures under the
present bill, the draft implementing bill and statement of
administrative action will be developed by the President in
close collaboration with the Committees of jurisdiction in both
Houses of Congress. This has been the practice under trade
promotion authority legislation. Because an implementing bill
subject to trade authorities procedures is not subject to
amendment, close cooperation between the executive branch and
the Committees of jurisdiction prior to the bill's introduction
is essential for positive consideration of the implementing
bill. In addition to such cooperation, the Committee expects
that other past practices--such as hearings, informal markups,
and informal conferences between House and Senate Committees of
jurisdiction--will precede formal transmittal of a trade
agreement, draft implementing bill, and supporting
documentation to Congress. To ensure that the legislative and
executive branches have adequate time to complete these pre-
transmittal processes, the bill establishes no deadline for
transmittal. It simply provides, in section 6(a)(1)(E), that
this is to happen ``after entering into the agreement.''
The supporting information that the President must transmit
to Congress, along with the agreement, draft implementing bill,
and statement of administrative action, consists of:
An explanation as to how the bill and
proposed administrative action will change or affect
existing law.
A statement asserting that the agreement
makes progress in achieving the applicable purposes,
policies, and objectives set forth in section 2 of the
bill, and an explanation of how and to what extent it
does so. This should be a detailed statement,
addressing each of the applicable purposes, policies,
and objectives in section 2 (recognizing that there may
be certain purposes, policies, and objectives that are
not applicable).
A statement of whether and how the agreement
changes provisions of previously negotiated agreements.
A statement of how the agreement serves the
interests of U.S. commerce.
A statement of how the draft implementing
bill meets the requirements for the application of
trade authorities procedures, set out in section
3(b)(3) of the bill. Section 3(b)(3) provides that the
rules for the consideration of bills implementing a
trade agreement contained in section 151 of the Trade
Act of 1974 apply only if the implementing bill
contains certain provisions. As explained above, such
bills must (1) contain a provision approving the
underlying trade agreement and the proposed statement
of administrative action, and (2) only contain changes
to existing law that are strictly necessary or
appropriate to implement the underlying agreement. The
supporting information accompanying transmittal of the
bill must explain how the bill meets each of these
requirements. In particular, it is important that the
President explain his reasons for believing that the
changes to existing law contained in the bill are
strictly necessary or appropriate to implement the
agreement.
To ensure that a trade agreement does not inadvertently
bestow benefits on countries not party to the agreement,
section 6(a)(3) requires that an implementing bill provide
explicitly that benefits and obligations under the agreement
apply only to the parties to the agreement. This section also
provides that an implementing bill may treat different trade
agreement partners other than uniformly, if such treatment is
consistent with the underlying agreement.
Section 6(a)(4) provides that in enacting a trade agreement
implementing bill, any side agreements between governments that
have not been disclosed to Congress will not be considered as
part of the agreement approved by Congress. In other words,
Congress's approval of a trade agreement is not an approval of
any undisclosed deals that may be ancillary to that agreement.
It is an approval only of those terms that have been expressly
disclosed and identified to Congress.
Section 6(b) sets forth certain conditions under which a
trade agreement implementing bill's eligibility for
consideration under trade authorities procedures may be
withdrawn. Section 6(b) establishes three circumstances under
which the trade authorities procedures described in section
3(b)(3) of the bill will not apply to trade agreement
implementing legislation. First, trade authorities procedures
will not apply to a particular agreement if a procedural
disapproval resolution has been adopted by Congress with
respect to that agreement. Second, trade authorities procedures
will not apply to an agreement if a consultation and compliance
resolution has been adopted by either Chamber of Congress with
respect to that agreement. Third, trade authorities procedures
will not apply if the Secretary of Commerce fails to transmit
to Congress, by December 15, 2015, a report identifying a
strategy for the United States to redress past instances in
which WTO dispute settlement panels have effectively added to
obligations or diminished rights of the United States.
A procedural disapproval resolution may be introduced at
any time by any Member of either House. The language of the
resolution is prescribed by section 6(b)(1)(B) of the bill. A
procedural disapproval resolution, if adopted, withdraws
application of trade authorities procedures to any implementing
bill submitted with respect to a trade agreement or agreements
as to which the President has failed or refused to notify or
consult, as defined by the bill (and discussed in detail
below). The Member introducing the resolution must identify in
the resolution the agreement or agreements as to which that
Member believes the President has failed or refused to notify
or consult with Congress.
Upon introduction, a procedural disapproval resolution will
be referred to the Committee on Ways and Means and the
Committee on Rules in the House of Representatives, and to the
Committee on Finance in the Senate. A procedural disapproval
resolution may not be amended, and may not be considered on the
floor of the House unless it has been reported by the Committee
on Ways and Means and the Committee on Rules, or the floor of
the Senate unless it has been reported by the Committee on
Finance.
If a procedural disapproval resolution is reported by the
Committee or (in the House) Committees to which it has been
referred, the procedural disapproval resolution will be
considered under expedited procedures in the Chamber to which
it has been reported, as set out in section 152(d) and (e) of
the Trade Act of 1974. Under those rules, a motion to proceed
to consideration of a qualifying procedural disapproval
resolution is considered privileged (in the Senate) or highly
privileged (in the House), and time for debate is limited. A
procedural disapproval resolution with respect to a particular
agreement may be considered under these rules in a given
Chamber only once per Congress. For trade authorities
procedures to be withdrawn pursuant to a disapproval
resolution, both Houses of Congress must adopt the procedural
disapproval resolution within 60 days of one another.
Section 6(b)(3) and (4) creates a new Consultation and
Compliance Resolution process for the Senate and House,
respectively. The Consultation and Compliance Resolution is an
additional mechanism to withdraw trade authorities procedures
for legislation implementing a trade agreement when it does not
comply with TPA, in particular because the President fails or
refuses to consult, or the agreement fails to make progress in
achieving the purposes, policies, priorities and objectives of
the bill. This mechanism reflects the critical role that
effective Congressional oversight plays in ensuring that the
President secures trade agreements that reflect Congressional
negotiating priorities. Furthermore, for Congressional
oversight to be effective, the Administration must adhere to
the consultation requirements established in the bill so that
Members, cleared advisors, and the public are appropriately
kept informed throughout the negotiation process. In that
regard, the House Committee on Ways and Means and the Senate
Committee on Finance play a particularly important role in
engaging with the Administration and ensuring that negotiations
reflect Congressional priorities.
The Committee intends to fully perform its responsibility
over the negotiation and implementation of trade agreements. It
is expected that, for any trade agreement transmitted to
Congress pursuant to this bill, the Committee will meet on
whether to report the implementing bill before it is considered
on the floor of the Chamber. When the Committee meets to
consider an implementing bill, it plans to report that bill,
either with a favorable recommendation, or with a
recommendation that is other than favorable. For every trade
agreement considered under expedited procedures since the Trade
Act of 1974 became law, the Ways and Means Committee of the
House and Finance Committee of the Senate have convened
meetings prior to floor consideration of an implementing bill.
These meetings have provided an important opportunity for
members of the Committees to discuss the merits of the
agreement and express their views on whether or not the
agreement reflects Congressional negotiating priorities and the
degree to which consultation requirements have been met.
Furthermore, the Committees have always reported implementing
bills to their respective chambers and expect to continue that
practice.
Under the new procedures in Section 6(b)(3) and (4), if
either of the Committees fails to favorably report an
implementing bill when the Committee meets on whether to report
an implementing bill, it will report a Consultation and
Compliance Resolution to its respective chamber that can result
in the disqualification of a bill implementing the trade
agreement from receiving trade authorities procedures in that
chamber. The Consultation and Compliance Resolution will ensure
that the Administration is particularly mindful of
Congressional negotiating priorities and consultation
requirements. As a result, the Administration will be more
likely to negotiate agreements that accurately reflect the
views of Congress and provide the greatest benefit to American
workers, businesses, farmers, manufacturers and service
providers.
Both a procedural disapproval resolution and a consultation
and compliance resolution withdraw trade authorities procedures
for an implementing bill when the President has failed or
refused to comply notify or consult in accordance with the
Bipartisan Congressional Trade Priorities and Accountability
Act of 2015 with respect to negotiations of the trade agreement
submitted with the implementing bill. The term ``failed or
refused to notify or consult in accordance with the Bipartisan
Congressional Trade Priorities and Accountability Act of 2015''
is defined to make clear that the President has not met his
obligations simply by going through the formalities of
consultations. Section 6(b)(1)(B)(ii) establishes that the
President has failed or refused to notify or consult if:
The President has failed to consult in
compliance with the consultation requirements of
sections 4 through 6 of this bill;
The U.S. Trade Representative has failed to
develop or meet the consultation guidelines required by
section 4 of the bill;
The President has not met with the
Congressional Advisory Groups on Negotiations pursuant
to a request of the groups; or
The agreement or agreements at issue fail to
make progress in achieving the purposes, policies,
priorities, and objectives of the bill.
The bill also states that trade authorities procedures
shall not apply to any implementing bill submitted with respect
to a trade agreement entered into under section 3(b) with a
country to which the minimum standards for the elimination of
trafficking (as set forth in section 108 of the Trafficking
Victims Protection Act of 2000 (22 U.S.C. 7106)) are applicable
and the government of which does not fully comply with such
standards and is not making significant efforts to bring the
country into compliance, as determined in the most recent
annual report on trafficking in persons submitted under section
110(b)(1) of the Trafficking Victims Protection Act of 2000 (22
U.S.C. 7107(b)(1)).
Section 6(c) affirms that the provisions for withdrawal of
trade authorities procedures contained here and elsewhere in
the bill are adopted pursuant to the constitutional authority
of each House of Congress to determine the rules of its
proceedings and to change those rules as it deems appropriate.
Section 7. Treatment of certain trade agreements for which negotiations
have already begun
Section 7 provides that the requirements (set forth in
section 4(a)) that the President notify and consult with
Committees of jurisdiction in Congress before initiating trade
agreement negotiations do not apply to certain negotiations
already underway at date of enactment. Specifically, the pre-
negotiation notice and consultation requirements do not apply
to negotiations commenced before enactment of the present bill.
This section applies to agreements (1) entered into under the
auspices of the World Trade Organization, (2) entered into with
the Trans-Pacific Partnership countries, (3) entered into with
the European Union, (4) entered into with respect to
international trade in services entered into with WTO members,
or (5) with respect to environmental goods entered into with
WTO members.
Since the foregoing negotiations already have commenced,
the absence of the formal notification and consultation that
ordinarily would be required before initiating negotiations
will not preclude trade authorities procedures from being
applied with respect to these agreements. Similarly, failure to
formally notify and consult with Congress before initiating
these agreements cannot form the basis for a disapproval
resolution under section 5(b)(1)(B). However, all notification
and consultation requirements that apply after negotiations
have commenced will apply with equal force to the negotiations
commenced and specified above.
Section 8. Sovereignty
The Bipartisan Congressional Trade Priorities and
Accountability Act of 2015 specifies, for the first time, that
no provision of any trade agreement entered into under trade
authorities procedures that is inconsistent with the laws of
the United States or any State or locality will have effect.
Section 8 further states that no provision of any trade
agreement entered into under trade authorities procedures will
prevent the United States or any State or locality from
amending or modifying the laws of the United States or any
State or locality, and that dispute settlement proceedings
shall have no binding effect on the law of the United States or
any State or locality.
Section 9. Interests of small businesses
Section 9 expresses the sense of Congress that the United
States Trade Representative should facilitate participation by
small businesses in the trade negotiation process, and
designates Assistant USTR for Small Business, Market Access,
and Industrial Competitiveness in the Office of the United
States Trade as responsible for ensuring the interests of small
business in trade negotiations are considered.
A. Addendum
Hon. Orrin G. Hatch,
Chairman Committee on Finance,
U.S. Senate, Washington, DC.
Dear Chairman Hatch: I am writing to express strong support
for the Trade Promotion Authority (TPA) legislation introduced
last week. The Bipartisan Congressional Trade Priorities and
Accountability Act of 2015 is a critical step toward delivering
high-quality trade agreements like the Trans-Pacific
Partnership (TPP) and the Transatlantic Trade and Investment
Partnership (T-TIP).
The Administration shares the concerns of many in Congress
about the currency policies of some of our major trading
partners. We know that unfair and inappropriate currency
polices have hurt our workers and firms. This is why the
Treasury Department remains strongly engaged with our trading
partners, both bilaterally and through the G-7, the G-20, and
the IMF. These efforts are showing real results: in particular,
China's exchange rate is up nearly 30 percent on a real
effective basis since 2010, and Japan has not intervened in the
foreign exchange market for more than three years. Many Members
of Congress and various stakeholders have made a strong case in
favor of addressing currency in the context of trade agreements
such as the TPP, and we support the current draft of the TPA
that includes a strong currency negotiating objective.
We are committed to continuing to work with you and with
other Members of Congress to best address currency concerns
through approaches that complement our ongoing engagement on
currency issues and help to expand U.S. exports and the high-
quality jobs associated with trade.
In light of the currency objective that is included in the
current TPA legislation, we began formal consultation with our
TPP partners and had a number of these conversations last week
during the Spring Meetings of the IMF and World Bank. Our
partners indicated a willingness to constructively discuss our
concerns about inappropriate currency policies, providing an
opportunity to work with them to develop an historic new
approach to promote greater accountability. Nonetheless, all of
the partners consulted have made clear that they will not
support the introduction of enforceable currency provisions in
the context of trade agreements, and specifically, the TPP. Our
partners fear that a trade agreement with an enforceable
currency discipline could constrain the ability of their
monetary authorities to conduct appropriate macroeconomic
policies, and that is a risk they are unwilling to take.
We have a serious concern that in any trade negotiation
other countries would insist that an enforceable currency
provision be designed so it could be used to challenge
legitimate U.S. monetary policy, an outcome we would find
unacceptable. Seeking enforceable currency provisions would
likely derail the conclusion of the TPP given the deep
reservations held by our trading partners. As such, any
amendment to TPA legislation requiring that the Administration
only seek enforceable currency provisions as a principal
negotiating objective would undermine our ability to
successfully conclude a TPP negotiation.
We also oppose the current legislation that would use the
countervailing duty process to address currency undervaluation.
The legislation raises questions about consistency with our
international obligations, and other countries might pursue
retaliatory measures that could hurt our exporters. Taking such
a unilateral step would be counterproductive to our ongoing
bilateral and multilateral engagement, as well as to our
efforts to promote greater accountability on currency policies
in the context of the TPP.
We look forward to working with you to effectively address
the currency issue in the context of our trade agreements. The
passage of bipartisan TPA legislation will allow us to enter
into trade agreements that expand opportunities for American
businesses, create high-quality jobs, and further unlock the
macroeconomic gains from expanded trade and investment.
Reducing trade barriers and securing reforms abroad through
well-crafted trade agreements benefit both U.S. economic
competitiveness and global economic prosperity.
Sincerely,
Jacob J. Lew.
V. VOTES OF THE COMMITTEE
In compliance with paragraph 7(c) of rule XXVI of the
Standing Rules of the Senate, the following statements are made
concerning the roll call votes in the Committee's consideration
of S. 995.
A. MOTION TO REPORT THE BILL
S. 995, as amended, was ordered favorably reported on April
22, 2015. The vote on the motion to report the bill was 20 to
6.
Ayes: Hatch, Grassley, Crapo, Roberts, Enzi, Cornyn, Thune,
Isakson, Portman, Toomey, Coats, Heller, Scott, Wyden,
Cantwell, Nelson, Carper, Cardin, Bennet, Warner.
Nays: Burr, Schumer, Stabenow, Menendez, Brown, Casey.
B. VOTES ON AMENDMENTS
Amendments offered to S. 995 were considered and disposed
of as follows:
(1) Senators Cardin, Portman, Cantwell, Schumer, Menendez,
Warner, Casey, and Heller offered an amendment to include, with
respect to the Transatlantic Trade and Investment Partnership
countries, a principal negotiating objective of the United
States to discourage politically motivated actions to boycott,
divest from, or sanction Israel or otherwise discourage
commercial activity between the United States and Israel. The
amendment was agreed to by a roll call vote, 26 ayes, 0 nays.
Ayes: Hatch, Grassley, Crapo, Roberts, Enzi (proxy),
Cornyn, Thune, Burr, Isakson, Portman, Toomey, Coats, Heller
(proxy), Scott, Wyden, Schumer, Stabenow, Cantwell, Nelson,
Menendez (proxy), Carper, Cardin, Brown, Bennet, Casey, Warner.
(2) Senators Portman, Stabenow, Burr, Brown, Casey, and
Schumer offered an amendment to include as a principal
negotiating objective of the United States with regard to
currency exchange practices to target exchange rate
intervention undertaken to gain advantage in trade by
establishing in trade agreements enforceable rules against
exchange rate manipulation, subject to the same dispute
settlement and remedies as other enforceable obligations under
the agreement. The amendment was defeated by a roll call vote,
11 ayes, 15 nays.
Ayes: Grassley, Crapo, Enzi, Burr, Portman, Schumer,
Stabenow, Menendez, Cardin, Brown, Casey.
Nays: Hatch, Roberts, Cornyn, Thune, Isakson, Toomey,
Coats, Heller, Scott, Wyden, Cantwell, Nelson, Carper, Bennet,
Warner.
(3) Senator Menendez offered an amendment to disallow the
application of trade authorities procedures to trade agreements
with countries included as a Tier III country on the State
Department's Trafficking in Persons Report. The amendment was
agreed to by a roll call vote, 16 ayes, 10 nays.
Ayes: Cornyn, Burr, Portman, Toomey, Coats, Wyden, Schumer
(proxy), Stabenow, Cantwell, Nelson, Menendez, Cardin, Brown,
Bennet, Casey, Warner.
Nays: Hatch, Grassley, Crapo, Roberts, Enzi, Thune,
Isakson, Heller, Scott, Carper.
(4) Senator Stabenow offered an amendment to disallow the
application of trade authorities procedures to trade agreements
with countries that engage in currency manipulation. The
amendment was defeated by a roll call vote, 9 ayes, 17 nays.
Ayes: Grassley, Burr, Portman, Schumer (proxy), Stabenow,
Menendez, Cardin, Brown, Casey.
Nays: Hatch, Crapo, Roberts, Enzi, Cornyn, Thune, Isakson,
Toomey, Coats, Heller, Scott, Wyden, Cantwell, Nelson, Carper
(proxy), Bennet, Warner.
(5) Senators Stabenow, Cantwell, and Brown offered an
amendment to include equal remuneration as a core labor
standard. The amendment was defeated by a roll call vote, 10
ayes, 16 nays.
Ayes: Schumer (proxy), Stabenow, Cantwell, Nelson,
Menendez, Cardin, Brown, Bennet, Casey, Warner.
Nays: Hatch, Grassley, Crapo, Roberts, Enzi, Cornyn, Thune,
Burr, Isakson, Portman, Toomey, Coats, Heller, Scott, Wyden,
Carper (proxy).
(6) Senators Menendez and Brown offered an amendment to
require parties to a trade agreement to implement measures to
bring labor laws and regulations into compliance with the
agreement before the agreement enters into force. The amendment
was defeated by a roll call vote, 7 ayes, 19 nays.
Ayes: Schumer, Stabenow, Menendez, Cardin, Brown, Bennet,
Casey.
Nays: Hatch, Grassley, Crapo (proxy), Roberts, Enzi,
Cornyn, Thune, Burr, Isakson, Portman, Toomey, Coats, Heller,
Scott, Wyden, Cantwell, Nelson, Carper, Warner.
(7) Senators Casey, Schumer, Stabenow, Menendez, Brown, and
Cardin offered an amendment to disallow the application of
trade authorities procedures to a trade agreement that would
weaken, undermine or necessitate the waiver of the Buy American
Act and the Buy America provisions of the Surface
Transportation Assistance Act of 1982. The amendment was
defeated by a voice vote.
(8) Senator Brown offered an amendment to the principal
negotiating objectives of the United States regarding foreign
investment to strike language concerning investor-state dispute
settlement. The amendment was defeated by a roll call vote, 9
ayes, 17 nays.
Ayes: Schumer, Stabenow, Cantwell, Nelson, Menendez,
Cardin, Brown, Bennet, Casey.
Nays: Hatch, Grassley, Crapo (proxy), Roberts, Enzi,
Cornyn, Thune, Burr, Isakson, Portman, Toomey, Coats, Heller,
Scott, Wyden, Carper, Warner.
(9) Senators Brown, Menendez, Stabenow, Casey, and Schumer
offered an amendment to prevent countries not already party to
the Trans-Pacific Partnership negotiations from joining the
negotiations without certification by Congress that the country
meets the standards of the Trans-Pacific Partnership
negotiations. The amendment was defeated by a roll call vote,
11 ayes, 15 nays.
Ayes: Grassley, Portman, Schumer, Stabenow, Cantwell,
Nelson, Menendez, Cardin, Brown, Bennet, Casey.
Nays: Hatch, Crapo, Roberts, Enzi, Cornyn, Thune, Burr,
Isakson, Toomey, Coats, Heller, Scott, Wyden, Carper, Warner.
(10) Senator Menendez offered an amendment to the principal
negotiating objectives of the United States regarding trade in
goods to provide that new trade agreements should avoid
negative effects on existing value chains established under
previous trade agreements. The amendment was defeated by a roll
call vote, 8 ayes, 18 nays.
Ayes: Schumer, Stabenow, Nelson, Menendez, Cardin, Brown,
Bennet, Casey.
Nays: Hatch, Grassley, Crapo, Roberts, Enzi, Cornyn, Thune,
Burr, Isakson, Portman, Toomey, Coats, Heller, Scott, Wyden,
Cantwell, Carper, Warner.
(11) Senator Brown offered amendments, considered en bloc,
to establish certain consultation requirements on automobiles,
auto parts, and industrial products. The amendments were
defeated by a roll call vote, 10 ayes, 16 nays.
Ayes: Portman, Schumer, Stabenow, Cantwell, Menendez,
Cardin, Brown, Bennet, Casey, Warner.
Nays: Hatch, Grassley (proxy), Crapo, Roberts, Enzi,
Cornyn, Thune, Burr, Isakson, Toomey, Coats, Heller, Scott,
Wyden, Nelson, Carper.
(12) Senator Brown offered an amendment to require that, in
order for a trade agreement to be considered under trade
authorities procedures, the Senate Finance Committee and the
House Ways and Means Committee must certify that trade
agreement achieves the negotiating objectives of the United
States. The amendment was defeated by a roll call vote, 7 ayes,
19 nays.
Ayes: Schumer, Stabenow, Cantwell, Menendez, Cardin, Brown,
Casey.
Nays: Hatch, Grassley (proxy), Crapo, Roberts, Enzi,
Cornyn, Thune, Burr, Isakson, Portman, Toomey, Coats, Heller,
Scott, Wyden, Nelson, Carper, Bennet, Warner.
(13) Senator Cardin offered an amendment to establish as a
principal negotiating objective of the United States with
respect to ensuring implementation of trade commitments and
obligations by strengthening good governance, transparency, the
effective operation of legal regimes and the rule of law of
trading partners of the United States is through capacity
building and other appropriate means, which are important parts
of the broader effort to create more open democratic societies
and to promote respect for internationally recognized human
rights. The amendment was agreed to by voice vote.
VI. BUDGETARY IMPACT OF THE BILL
A. Committee Estimates
In compliance with paragraph 11(a) of rule XXI of the
Standing Rules of the Senate and section 308 of the
Congressional Budget and Impoundment Control Act of 1974, as
amended (the ``Budget Act''), the following statement is made
concerning the estimated budget effects of the revenue
provisions of the bill.
Enacting S. 995 would have no budget impact.
B. Budget Authority and Tax Expenditures
Budget authority. In compliance with section 308(a)(1) of
the Budget Act, the Committee states that no provision of the
bill as reported involves new or increased budget authority.
Tax expenditures. In compliance with section 308(a)(1) of
the Budget Act, the Committee states that the bill will result
in no change in tax expenditures.
C. Consultation With Congressional Budget Office
In accordance with section 402 of the Budget Act, the
Committee advises that the Congressional Budget Office has
submitted the following statement on the budgetary impact of
the bill.
April 30, 2015.
Hon. Orrin G. Hatch,
Chairman, Committee on Finance,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 995, the Bipartisan
Congressional Trade Priorities and Accountability Act of 2015.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Ann E.
Futrell.
Sincerely,
Keith Hall,
Director.
Enclosure.
S. 995--Bipartisan Congressional Trade Priorities and Accountability
Act of 2015
The Bipartisan Congressional Trade Priorities and
Accountability Act of 2015 would restore the President's
authority to enter into multilateral and bilateral trade
agreements. The authority would be extended through July 1,
2018, with the possibility to extend for another three years at
the President's request. Pay-as-you-go procedures apply because
enacting the legislation could affect revenues. Enacting the
bill would not affect direct spending.
The bill would authorize two different methods for the
United States to enter into multilateral and bilateral trade
agreements. First, the bill would reinstate a rarely used
authority that would allow the President to reduce certain duty
rates within specified limitations without further
Congressional action. While this authority could result in a
reduction in revenue, CBO has no basis for determining when or
if the President would lower duty rates or the extent of such
changes. Therefore, CBO cannot estimate the effect of enacting
this provision.
Second, the bill would restore the President's authority to
propose trade agreements under an expedited procedure for
Congressional approval, often referred to as ``fast track
authority.'' For such trade agreements, the Congress would not
be able to amend the implementing legislation once it was
introduced. Furthermore, as long as the President met statutory
requirements concerning Congressional consultation during the
negotiation process, the Congress would be required to act on
the legislation following a strict timetable. CBO estimates
that enacting this authority would not affect revenues or
direct spending because future trade agreements would require
the Congress to pass implementing legislation.
In addition, implementing the legislation would affect
spending subject to appropriation. Based on information from
the U.S. International Trade Commission, CBO estimates that
implementing the reporting requirements under the bill would
cost less than $500,000 over the 2015-2020 period, assuming the
availability of appropriated amounts.
The bill also would amend current law regarding oversight
and consultations during trade agreements. Specifically, the
bill would require a number of consultations by the U.S. Trade
Representative with congressional advisory committees regarding
trade talks. According to the U.S. Trade Representative, this
provision would generally codify the agency's current policy
and practice. Thus, CBO estimates implementing these
requirements would cost less than $500,000 over the 2015-2020
period.
On April 29, 2015, CBO transmitted a cost estimate for H.R.
1890, the Bipartisan Congressional Trade Priorities and
Accountability Act of 2015, as ordered reported by the House
Committee on Ways and Means on April 23, 2015. This bill
contains similar language to that of H.R. 1890 and CBO's
estimates of the budgetary effects of the two pieces of
legislation are the same.
The bill contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of state, local, or tribal
governments.
The CBO staff contact for this estimate is Ann E. Futrell.
The estimate was approved by Theresa Gullo, Assistant Director
for Budget Analysis.
VII. REGULATORY IMPACT AND OTHER MATTERS
In compliance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee states that the
bill will not significantly regulate any individuals or
businesses, will not affect the personal privacy of
individuals, and will result in no significant additional
paperwork.
The following information is provided in accordance with
section 423 of the Unfunded Mandates Reform Act of 1995 (Pub.
L. No. 104-4). The Committee has reviewed the provisions of S.
995 as approved by the Committee on April 22, 2015. In
accordance with the requirements of Pub. L. No. 104-04, the
Committee has determined that the bill contains no
intergovernmental mandates, as defined in the UMRA, and would
not affect the budgets of state, local, or tribal governments.
VIII. ADDITIONAL VIEWS
ADDITIONAL VIEWS OF SENATOR HELLER
One amendment of this report deserves further elaboration.
On April 22, Senator Menendez's #1 amendment to S.995 passed by
a vote of 16-10. The amendment passed as a part of legislation
to establish congressional trade negotiating objectives and
enhanced consultation requirements for trade negotiations.
As someone who offered an amendment that was included in
the Senate-passed human trafficking legislation, the Justice
for Victims of Trafficking Act, this is a very important issue
to Nevadans. That being said, I do not believe human
trafficking should be the sole litmus test on expedited
consideration of trade legislation. I look forward to working
with my colleagues on the most effective ways to eradicate
human trafficking in all countries.
ADDITIONAL VIEWS OF SENATOR WYDEN
I have one additional comment regarding this bill. With
respect the investment negotiating objectives, I note that it
may be appropriate in some circumstances to limit the scope of
remedies available to investors in certain sectors or products
in the interest of public health, and the negotiating
objectives in the bill with respect to investment do not
exclude that possibility. This understanding is consistent with
the overall negotiating objective requiring negotiators to take
into account legitimate domestic objectives such as the
protection of legitimate health or safety.
IX. MINORITY VIEWS
MINORITY VIEWS OF SENATOR BROWN, SENATOR CASEY, AND SENATOR STABENOW
The Bipartisan Trade Promotion Authority provides fast
track authority to the President for the purposes of completing
the Trans-Pacific Partnership and the Transatlantic Trade and
Investment Partnership, as well as other agreements. Together,
TPP and TTIP account for more than 60 percent of the world's
gross domestic product and will have an enormous impact on the
United States economy. It is critical that we get these
agreements right. Unfortunately, the negotiating objectives in
the underlying bill are insufficient, and the fast track
process leaves little room for Congress to ensure our trade
agreement will create jobs and grow wages for American workers.
First, the negotiating objectives outlined in the bill are
not mandatory. The bill stipulates only that the President
``make progress in achieving'' the negotiating objectives. As a
result, the President is not required to negotiate an agreement
that meets the priorities provided by Congress in the
negotiating objectives. This is particularly convenient for the
Administration with respect to TPP, for which negotiations are
nearly complete. It is difficult to see how the priorities
outlined by Congress in this bill could influence the trade
talks at such a late stage.
Second, the negotiating objectives are not strong enough,
and efforts to strengthen them were blocked in committee. The
labor and environment negotiating objective, for example, does
not require U.S. trading partners to meet the labor and
environmental standards before receiving the benefit of an
agreement. This is of particular concern for TPP, which
includes Vietnam where workers do not have the right to
collectively bargain or choose their own representation. An
amendment was offered in committee to ensure trading partners'
compliance before an agreement is implemented, but it was
defeated. Another amendment was offered to ensure the labor
standards reflected in the bill include equal remuneration.
This amendment was defeated as well.
The negotiating objective with respect to currency in the
underlying bill is weak and does not specify that currency
disciplines in an agreement must be enforceable and subject to
the same dispute settlement provisions as all other provisions
in the agreement. An amendment was offered in committee to
strengthen the provision but it was not adopted. Diplomatic
efforts to address currency manipulation have been woefully
insufficient because they have not been accompanied by any
enforcement mechanisms. The TPP agreement includes countries
that have a history of manipulating their currencies, and there
have been discussions about China joining the agreement in the
future. Strong and enforceable currency manipulation
disciplines in TPP are necessary to ensure American workers and
businesses compete on a level playing field. Without
improvement, the negotiating objectives in the bill will not
lead to strong and enforceable provisions in our trade
agreements. And if the negotiating objectives are not
mandatory, the President can continue to pick and choose which
ones he or she tries to achieve.
Third, the bill outlines a process by which trade
agreements are to be considered in Congress, but this process
relegates Congress' role in trade negotiations to that of a
rubber stamp. In exchange for giving up its right to amend a
trade agreement, Congress receives some assurances that they
will be consulted by the President. The details of these
consultation requirements, however, are left to the United
States Trade Representative in guidelines. In addition, the
process does not obligate the President to consult adequately
on all important issues before trade negotiations. For example,
an amendment was offered in committee that would require the
President to consult with Congress on industrial products and
automobiles and auto parts before negotiations begin. This
amendment would have brought pre-negotiation consultation
requirements for those goods in line with agricultural goods.
The amendment was defeated. The bill also allows the President
to certify that the agreement has made progress in achieving
Congress' negotiating objectives. The President certainly will
certify that the agreement he or she has negotiated has done
so. An amendment was offered in committee that would have
required Congress to certify that the negotiating objectives
have been met, but it was not adopted.
Lastly, the bill does not adequately address how future
countries may join the TPP agreement. An amendment was offered
in committee to require the House Ways and Means Committee and
the Senate Finance Committee to certify that a potential TPP
partner has met the standards of the agreement. The amendment
also required both chambers of Congress to vote for that
country to join the agreement. The amendment was defeated, and
Congress' role in evaluating China's participation in TPP
remains unclear. Underlying bill is the first trade promotion
authority legislation that Congress has considered in 13 years,
and the TPP agreement is the largest agreement the U.S. has
ever negotiated. Careful consideration of fast track
procedures, the negotiating objectives, and Congress' role in
trade authority is needed to ensure TPP and TTIP are high
standard agreements that create a level playing field for
American businesses and workers. Unfortunately, efforts to
strengthen the negotiating objective and expand Congress' role
in trade negotiations were not accepted. As a result, the
underlying bill will allow for expedited consideration of trade
agreements that will further erode the American middle class.
X. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
In the opinion of the Committee, in order to expedite the
business of the Senate, it is necessary to dispense with the
requirements of paragraph 12 of rule XXVI of the Standing Rules
of the Senate (relating to the showing of changes in existing
law made by the bill as reported by the Committee).
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